AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 23, 1999
REGISTRATION NO. 333 - _______________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
TELESCAN, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 061489574
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR
ORGANIZATION) IDENTIFICATION NO.)
5959 Corporate Drive, Suite 2000
Houston, Texas 77036
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
1995 Stock Option Plan
Amended Stock Option Plan
(FULL TITLE OF THE PLAN)
Alex Wyche
General Counsel
Telescan, Inc.
5959 Corporate Drive, Suite 2000
Houston, Texas 77036
(NAME AND ADDRESS OF AGENT FOR SERVICE)
(281) 588-9700
(TELEPHONE NUMBER, INCLUDING AREA CODE, OF AGENT FOR SERVICE)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
============================================================================================
PROPOSED
AMOUNT MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE(1) OFFERING PRICE(1) REGISTRATION FEE
- -------------------- ---------- ------------ ----------------- ----------------
<S> <C> <C> <C> <C>
COMMON STOCK, PAR
VALUE $.01 PER SHARE
("COMMON STOCK") 712,500 $17.219 $12,268,181.25 $3,410.55
============================================================================================
(1) Estimated solely for purposes of calculating the registration fee pursuant
to Rule 457 (c) and (h) based on the average of the high and low sales
price of a share of the Company's Common Stock on the Nasdaq National Market
on August 20, 1999.
============================================================================================
</TABLE>
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents filed by Telescan, Inc. (the "Company" or
"Telescan") with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 (File No. 0-17508) are hereby incorporated by reference in
this Registration Statement:
(i) The Company's Annual Report on Form 10-K for the year ended December
31, 1998;
(ii) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1999;
(iii) The Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1999;
(iv) The Company's Current Report on Form 8-K dated January 22, 1999;
(v) The Company's Current Report on Form 8-K dated June 11, 1999;
(vi) The Company's Current Report on Form 8-K dated July 30, 1999; and
(vii) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-1 dated June 15, 1998.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Securities Exchange Act of 1934, 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
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in this Registration Statement and to be part hereof
from the date of the filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
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<PAGE>
Section 145 of the General Corporation Law of the State of Delaware provides
generally and in pertinent part that a Delaware corporation may indemnify its
directors and officers against expenses (including attorneys' fees), judgments,
fines, and amounts paid in settlement actually and reasonably incurred by them
in connection with any civil, criminal, administrative, or investigative action,
suit or proceeding except actions by or in the right of the corporation if, in
connection with the matters in issue, they acted in good faith and in a manner
they reasonably believed to be in or not opposed to the best interests of the
corporation, and in connection with any criminal action or proceeding if, in
connection with the matters in issue, they had no reasonable cause to believe
their conduct was unlawful. Section 145 further provides that in connection with
the defense or settlement of any action or suit by or in the right of the
corporation, a Delaware corporation may indemnify its directors and officers
against expenses (including attorneys' fees) actually and reasonably incurred by
them if, in connection with the matters in issue, they acted in good faith and
in a manner they reasonably believe to be in or not opposed to the best
interests of the corporation, except that no indemnification may be made with
respect to any claim, issue, or matter as to which such person has been adjudged
liable to the corporation unless and only to the extent that the Delaware Court
of Chancery or other court in which such action or suit is brought approves such
indemnification.
Section 145 further permits a Delaware corporation to grant its directors
and officers additional rights of indemnification through bylaw provisions and
otherwise, and to purchase indemnity insurance on behalf of its directors and
officers. In addition, Article V of the Registrant's By-Laws "Indemnification of
Directors, Officers, Employees and Other Agents" provides as follows:
SECTION 1.DEFINITIONS. For the purpose of this Article V, "agent" means
any person who is or was a director, officer, employee or other agent of
the corporation, or is or was serving at the request of the corporation
as a director, officer, employee or agent of another foreign or domestic
corporation, partnership, joint venture, trust or other enterprise, or
was a director, officer, employee or agent of a foreign or domestic
corporation which was a predecessor corporation of the corporation or of
another enterprise at the request of such predecessor corporation;
"proceeding" means any threatened, pending or completed action or
proceeding, whether civil, criminal, administration or investigative;
and "expenses" includes, without limitation, attorneys' fees and any
expenses of establishing a right to indemnification under Section 4 of
Section 5(c) of this Article V.
SECTION 2. ACTIONS BY THIRD PARTIES. The corporation shall indemnify any
person who was or is a party, or is threatened to be made a party, to
any proceeding (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was an agent
of the corporation, against expenses, judgments, fines, settlements and
other amounts actually and reasonably incurred in connection with such
proceedings to the fullest extent permitted by the laws of the State of
Delaware as they may exist from time to time.
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<PAGE>
SECTION 3. ACTION BY OR IN THE RIGHT OF THE CORPORATION. The corporation
shall indemnify any person who was or is a party, or is threatened to be
made a party, to any threatened, pending or completed action by or in
the right of the corporation to procure a judgment in its favor by
reason of the fact that such person is or was an agent of the
corporation, against expenses actually and reasonably incurred by such
person in connection with the defense or settlement of such action to
the fullest extent permitted by the laws of the State of Delaware as
they may exist from time to time.
SECTION 4. ADVANCE OF EXPENSES. Expenses incurred in defending any
proceeding shall be advanced by the corporation prior to the final
disposition of such proceeding upon receipt of a request therefor and an
undertaking by or on behalf of the agent to repay such amount unless it
shall be determined ultimately that the agent is not entitled to be
indemnified as authorized in this Article V.
SECTION 5. CONTRACTUAL NATURE. The provisions of this Article V shall be
deemed to be a contract between the corporation and each director and
officer who serves in such capacity at any time while this Article is in
effect, and any repeal or modification thereof shall not affect any
rights or obligations then existing with respect to any state of facts
then or theretofore existing or any action, suit or proceeding
theretofore existing or any action, suit or proceeding theretofore or
thereafter brought based in whole or in part upon any such state of
facts.
SECTION 6. INSURANCE. Upon and in the event of a determination by the
board of directors to purchase such insurance, the corporation shall
purchase and maintain insurance on behalf of any agent of the
corporation against any liability asserted against or incurred by the
agent in such capacity or arising out of the agent's status as such
whether or not the corporation would have the power to indemnify the
agent against such liability under the provisions of this Article V. All
amounts received by an agent under any such policy of insurance shall be
applied against, but shall not limit, the amounts to which the agent is
entitled pursuant to the foregoing provisions of this Article V.
SECTION 7. ERISA. To assure indemnification under this provision of all
such persons who are or were "fiduciaries" of an employee benefit plan
governed by the Employee Retirement Income Security Act of 1974, as
amended from time to time ("ERISA"), the provisions of this Article V
shall, except as limited by Section 410 of ERISA, be interpreted as
follows: an "other enterprise" shall be deemed to include an employee
benefit plan; the corporation shall be deemed to have requested a person
to serve as an employee of an employee benefit plan where the
performance by such person of his duties to the corporation also imposes
duties on, or otherwise involves services by, such person to the plan or
participants or beneficiaries of the plan; excise
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<PAGE>
taxes assessed on a person with respect to an employee benefit plan
pursuant to ERISA shall be deemed "fines"; and action taken or omitted
by a person with respect to an employee benefit plan in the performance
of such person's duties for a purpose reasonably believed by such person
to be in compliance with ERISA and the terms of the plan shall be deemed
to be for a purpose which is not opposed to the best interests of the
corporation.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
EXHIBIT NO. EXHIBIT
---------- ----------
4.1 Restated Certificate of Incorporation of
Registrant. (Incorporated by reference to the
Company's Form S-1 dated September 14, 1993
(Registration No. 33-52182)).
4.2 Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant. (Incorporated by
reference to the Company's Form S-1 dated September
14, 1993 (Registration No. 33-52182)).
4.3 By-laws of the Registrant. (Incorporated by
reference to the Company's Form S-1 dated September
14, 1993 (Registration No. 33-52182)).
*5.1 Opinion of Locke Liddell & Sapp LLP
*23.1 Consent of Locke Liddell & Sapp LLP (Contained in
Exhibit 5.1).
*23.2 Consent of Hein + Associates, LLP
*24.1 Powers of Attorney (Included on Page II-6).
*99.1 1995 Stock Option Plan
*99.2 Amended Stock Option Plan
- -----------------------------------
* Filed herewith
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<PAGE>
ITEM 9. UNDERTAKINGS.
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 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;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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
offering.
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
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 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 Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 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 against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 Houston, State of Texas, on this 23rd day of August,
1999.
TELESCAN, INC.
By: /S/ DAVID L. BROWN
David L. Brown
Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints David L. Brown and Roger C. Wadsworth and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution for him and in his name, place and stead, in any
and all capacities, to sign, execute and file this Registration Statement under
the Securities Act and any and all amendments (including, without limitation,
post-effective amendments and any amendment or amendments or additional
registration statements filed pursuant to Rule 462 under the Securities Act
increasing the amount of securities for which registration is being sought) to
this Registration Statement, and to file the same, with all exhibits thereto,
and all other statements, notices or other documents necessary or advisable to
comply with the applicable state securities laws, and to file the same, together
with other documents in connection therewith, with the appropriate state
securities authorities, granting unto said attorneys-in-fact and agents full
power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on August 23, 1999.
SIGNATURE TITLE
--------- -----
/S/ DAVID L. BROWN Director, Chairman and Chief
- ------------------------ Executive Officer
David L. Brown
/S/ RICHARD K. CARLIN Director, Vice Chairman and Chief
- ------------------------ Technology Officer
Richard K. Carlin
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<PAGE>
/S/ RONALD WARREN President and Chief Financial
- ------------------------ Officer
Ronald Warren
/S/ ROGER C. WADSWORTH
- ------------------------
Roger C. Wadsworth Director and Senior Vice President
- ------------------------ Director
Christopher A. Glowacki
/S/ RONALD W. HART, PH.D. Director
- ------------------------
Ronald W. Hart, Ph.D.
/S/ BURT H. KEENAN Director
- ------------------------
Burt H. Keenan
Director
- ------------------------
Russell I. Pillar
/S/ ROY T. RIMMER, JR. Director
- ------------------------
Roy T. Rimmer, Jr.
/S/ WILLIAM D. SAVOY Director
- ------------------------
William D. Savoy
/S/ STEPHEN C. WOOD Director
- ------------------------
Stephen C. Wood
/S/ LAIRD FOSHAY Director
- ------------------------
Laird Foshay
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<PAGE>
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT
----------- -------
4.1 Restated Certificate of Incorporation of the Company
(incorporated by reference to Exhibit 3(b) of the
Company's Quarterly Report, as amended, on Form 10-Q for
the three months ended September 30, 1997.
4.2 Certificate of Amendment of Restated Certificate of
Incorporation of the Registrant. (Incorporated by
reference to the Company's Form S-1 dated September 14,
1993 (Registration No. 33-52182)).
4.3 Bylaws of the Company (incorporated by reference to
Exhibit 3.2 to Post-Effective Amendment No. 1 to the
Company's Registration Statement on Form S-4 (File No.
33-60103)).
*5.1 Opinion of Locke Liddell & Sapp LLP
Consent of Locke Liddell & Sapp LLP (Contained in
*23.1 Exhibit 5.1).
*23.2 Consent of Hein + Associates, LLP
*24.1 Powers of Attorney (Included on Page II- 6).
*99.1 1995 Stock Option Plan
*99.2 Amended Stock Option Plan
- -----------------------------------
* Filed herewith
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EXHIBIT 5.1
[LETTERHEAD OF LOCKE LIDDELL & SAPP LLP]
August 23, 1999
Telescan, Inc.
5959 Corporate Drive, Suite 2000
Houston, Texas 77036
Gentlemen:
We have acted as counsel for Telescan, Inc., a Delaware corporation (the
"Company"), in connection with the registration, pursuant to a Registration
Statement on Form S-8 being filed with the Securities and Exchange Commission
(the "Registration Statement") under the Securities Act of 1933, as amended, of
the offering of up to 712,500 shares of the Company's common stock, par value
$.01 per share (the "Common Stock"), which may be issued under the Company's
1995 Stock Option Plan and Amended Stock Option Plan (collectively, the
"Plans").
In such capacity, we have examined the corporate documents of the Company,
including its Restated Certificate of Incorporation and its Bylaws, each as
amended, and resolutions adopted by its board of directors and committees
thereof. We have also examined the Registration Statement, together with the
exhibits thereto, and such other documents which we have deemed necessary for
the purposes of the expressing the opinion contained herein. We have relied on
representations made by and certificates of the officers of the Company and
public officials with respect to certain facts material to our opinion. We have
made no independent investigation regarding such representations and
certificates.
Based upon the foregoing, we are of the opinion that the shares of Common
Stock, when issued pursuant to the provisions of the Plans, will be duly
authorized, validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Locke Liddell & Sapp LLP
II-9
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
The Board of Directors
Telescan, Inc.:
We hereby consent to the incorporation by reference in the Registration
Statement filed on Form S-8, and the accompanying Prospectus, of our report
dated February 5, 1999, appearing on page F-1 of Telescan, Inc.'s Annual Report
on Form 10-K for the year ended December 31, 1998.
s/s Hein + Associates LLP
Hein + Associates LLP
Houston, Texas
August 23, 1999
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EXHIBIT 99.1
TELESCAN, INC.
AMENDED AND RESTATED
1995 STOCK OPTION PLAN
1. Purpose. The purpose of this Stock Option Plan ("the Plan") is to
further the interest of the Company, its subsidiaries and its shareholders by
providing incentives in the form of stock options to key employees and directors
who contribute materially to the success and profitability of the Company. The
grants will recognize and reward outstanding individual performances and
contributions and will give such persons a proprietary interest in the Company,
thus enhancing their personal interest in the Company's continued success and
progress. This Plan will also assist the Company and its subsidiaries in
attracting and retaining key employees and directors. The options granted under
this Plan may be either Incentive Stock Options, as that term is defined in
Section 422 of the Internal Revenue Code of 1986, as amended, or nonstatutory
options taxed under Section 83 of the Internal Revenue Code of 1986, as amended.
2. Definitions. The following definitions shall apply to this Plan:
(a) "Board" means the board of directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee of the Board
which shall consist of two or more directors of the Company
appointed by the Board.
(d) "Common Stock" means the Common Stock, par value $0.01 per
share, of the Company or such other class of share or
securities as to which the Plan may be applicable, pursuant
to Section 12 herein.
(e) "Company" means Telescan Inc., a Delaware corporation.
(f) "Continuous Service" means the absence of any interruption or
termination of employment with or service to the Company or
any parent or subsidiary of the Company that now exists or
hereafter is organized or acquired by or acquires the
Company. Continuous Service shall not be considered
interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Company or in the case
of transfers between locations of the Company or between the
Company, its parent, its subsidiaries or its successors.
(g) "Date of Grant" means the date on which the Committee grants
an Option.
(h) "Disinterested Person" means a disinterested person as
defined in Rule 16b-3 of the Rules and Regulations
promulgated under the Exchange Act, or any successor
regulation or statute adopted under the federal securities
laws.
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<PAGE>
(i) "ERISA" means the Employee Retirement Income Security Act, as
amended.
(j) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(k) "Employee" means any person employed on an hourly or salaried
basis by the Company or any parent or subsidiary of the
Company that now exists or hereafter is organized or acquired
by or acquires the Company.
(l) "Fair Market Value" means (i) if the Common Stock is not
listed or admitted to trade on a national securities exchange
and if bid and ask prices for the Common Stock are not
furnished through NASDAQ or a similar organization, the value
established by the Committee, in its sole discretion, for
purposes of the Plan; (ii) if the Common Stock is listed or
admitted to trade on a national securities exchange or a
national market system, the closing price of the Common
Stock, as published in the WALL STREET JOURNAL, so listed or
admitted to trade on such day or, if there is no trading of
the Common Stock on such date, then the closing price of the
Common stock on the next preceding date on which there was
trading in such shares; or (iii) if the Common Stock is not
listed or admitted to trade on a national securities exchange
or a national market system, the mean between the bid and
asked price for the Common Stock on such date, as furnished
by the National Association of Securities Dealers, Inc.
through NASDAQ or a similar organization if NASDAQ is no
longer reporting such information.
(m) "Incentive Stock Option" means a stock option, granted
pursuant to either this Plan or any other plan of the
Company, that satisfies the requirements of Section 422 of
the Code and that entitles the Optionee to purchase stock of
the Company or in a corporation that at the time of grant of
the option was a parent or subsidiary of the Company or a
predecessor corporation of any such corporation.
(n) "Non-Employee Director" means any member of the Board who is
not an Employee.
(o) "Nonstatutory Option" shall have the meaning as used in
Section 9 herein.
(p) "Option" means a stock option granted pursuant to the Plan.
(q) "Option Period" means the period beginning on the Date of
Grant and ending on the day prior to the tenth anniversary of
the Date of Grant or such shorter termination date as set by
the Committee.
(r) "Optionee" means an Employee or Non-Employee Director who
receives an Option.
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<PAGE>
(s) "Parent" means any corporation which owns 50% or more of the
voting securities of the Company.
(t) "Plan" means this Stock Option Plan.
(u) "Share" means the Common Stock, as adjusted in accordance
with Section 13 of the Plan.
(v) "Subsidiary" means any corporation 50% or more of the voting
securities of which are owned directly or indirectly by the
Company at any time during the existence of this Plan.
3. ADMINISTRATION. This Plan will be administered by the Committee. A
majority of the full Committee constitutes a quorum for purposes of
administering the Plan, and all determinations of the Committee shall be made by
a majority of the members present at a meeting at which a quorum is present or
by the unanimous, written consent of the Committee.
Each member of the Committee must be a Disinterested Person.
Accordingly, a member of the Committee shall not be granted or awarded Options
under the Plan and shall not be granted or awarded options, grants, awards or
other rights pursuant to any other plan of the Company or any of its affiliates
if a grant or award under such plan would cause such person not to be or to lose
his status as a Disinterested Person. If a member of the Committee ceases to be
a Disinterested Person for any reason, such person shall immediately, without
any action by the Board, cease to be a member of the Committee.
The Committee has the exclusive power to select the Employee
participants in this Plan, to establish the terms of the Options granted to each
Employee participant, and to make all other determinations necessary or
advisable under the Plan. The Committee has the sole and absolute discretion to
determine whether the performance of an eligible Employee warrants an award
under this Plan, and to determine the amount of the award. The Committee has
full and exclusive power to construe and interpret this Plan, to prescribe and
rescind rules and regulations relating to this Plan, and take all actions
necessary or advisable for the Plan's administration. Any such determination
made by the Committee will be final and binding on all persons. A member of the
Committee will not be liable for performing any act or making any determination
in good faith.
4. SHARES SUBJECT TO OPTION. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan shall be 637,500. Such shares may be authorized but unissued, or
may be treasury shares. If an Option shall expire or become unexercisable for
any reason without having been exercised in full, the unpurchased Shares that
were subject to the Option shall, unless the Plan has then terminated, be
available for other Options under the Plan.
5. EMPLOYEE PARTICIPATION.
(a) ELIGIBLE EMPLOYEES. Every Employee, as the Committee in its
sole discretion designates, is eligible to participate in
this Plan. The Committee's award of
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<PAGE>
an Option to an Employee in any year does not require the
Committee to award an Option to that Employee in any other
year. Furthermore, the Committee may award different Options
to different participants. The Committee may consider such
factors as it deems pertinent in selecting participants and
in determining the amount of their Option, including,
without limitation: (i) the financial condition of the
Company or its Subsidiaries; (ii) expected profits for the
current or future years; (iii) the contributions of
prospective employees to the profitability and success of
the Company or its Subsidiaries ; and (iv) the adequacy of
the Employee's other compensation. Employees may include
persons to whom stock, stock options, or other benefits
previously were granted under this or another plan of the
Company or any Subsidiary, whether or not the previously
granted benefits have been fully exercised.
(b) NO RIGHT OF EMPLOYMENT. An Optionee's right, if any, to
continue to serve the Company and its Subsidiaries as an
Employee will not be enlarged or otherwise affected by his
designation as a participant under this Plan, and such
designation will not in any way restrict the right of the
Company or any Subsidiary, as the case may be, to terminate
at any time the employment of any participant.
6. NON-EMPLOYEE DIRECTOR PARTICIPATION.
(a) GRANTS OF AWARDS. The Compensation Committee shall have full
discretion to grant Options to Non-Employee Directors at such
times as it deems appropriate, to determine the number of
shares of Common Stock underlying such Options, and to
determine the other terms and provisions thereof subject to
the other terms of the Plan.
(b) NON-TRANSFERABILITY. Each Option granted to Non-Employee
Directors by its term shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of ERISA, or the
rules thereunder, and shall be exercised during the lifetime
of the Optionee only by him. Except as set forth herein, no
Option granted to Non-Employee Directors or interest therein
may be transferred, assigned, pledged or hypothecated by the
Optionee during his lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment or
similar process.
7. OPTION REQUIREMENTS. Each Option granted under this Plan shall
satisfy the following requirements.
(a) WRITTEN OPTION. An Option shall be evidenced by a written
instrument specifying (i) the number of Shares that may be
purchased by its exercise, (ii) the intent of the Committee
as to whether the Option is to be an Incentive
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<PAGE>
Stock Option or a Nonstatutory Option, and (iii) such terms
and conditions consistent with the Plan as the Committee
shall determine.
(b) DURATION OF OPTION. Each Option may be exercised only during
the Option Period designated for the Option by the Committee.
At the end of the Option Period the Option shall expire.
(c) OPTION EXERCISABILITY. Unless otherwise provided by the
Committee on the grant of an Option, each Option shall be
exercisable only as to no more than one-fourth (3) of the
total number of shares covered by the Option during each
twelve-month period commencing twelve months after the date
the Option is granted. Notwithstanding the foregoing, an
Option is exercisable only if the issuance of Shares pursuant
to the exercise would be in compliance with applicable
securities laws, as contemplated by Section 11 of this Plan.
To the extent an Option is either unexercisable or
unexercised, the unexercised portion shall accumulate until
the Option both becomes exercisable and is exercised but in
no case beyond the date that is ten years from the date the
Option is granted.
(d) ACCELERATION OF VESTING. Subject to the provisions of Section
6 and 8(b), the Board may, in its discretion, provide for the
exercise of Options either as to an increased percentage of
shares per year or as to all remaining shares. Such
acceleration of vesting may be declared by the Board at any
time before the end of the Option Period, including, if
applicable, after termination of the Optionee's Continuous
Service by reason of death, disability, retirement or
termination of employment.
(e) OPTION PRICE. Except as provided in Section 8(a) and 9, the
Option price of each Share subject to the Option shall equal
the Fair Market Value of the Share on the Option's Date of
Grant. Notwithstanding the preceding sentence or any other
provision hereof, no Option granted hereunder shall be at an
Option price less than $1.50 per share.
(f) TERMINATION OF SERVICES. If the Optionee ceases Continuous
Service for any reason other than death, disability, or
retirement on or after the age of 65 of the Optionee, all
Options held by the Optionee shall lapse immediately
following the last day that the Optionee is employed by the
Company, or the effective date of the termination of his
services to the Company. On the grant of an Option, the
Committee may, in its discretion, extend the time during
which the Option may be exercised after termination of
services. Any such option shall lapse at the end of the
period established by the Committee for exercise after
termination of services. The Option may be exercised on such
termination date, subject to any adjustment under Section
7(d) and 13.
(g) DEATH. In the case of death of the Optionee, the
beneficiaries designated by the Optionee shall have one year
from the Optionee's demise or to the end of
II-15
<PAGE>
the Option Period, whichever is earlier, to exercise the
Option; provided, however, the Option may be exercised only
for the number of Shares for which it could have been
exercised at the time the Optionee died, subject to any
adjustment under Section 7(b) and 13.
(h) RETIREMENT. If the Optionee retires on or after attaining age
65, the Option shall lapse at the earlier of the end of the
Option Period or three months after the date of retirement;
provided, however, the Option may be exercised only for the
number of Shares for which it could have been exercised on
the retirement date, subject to any adjustment under Section
7(d) and 13.
(i) DISABILITY. In the event of termination of Continuous Service
due to total and permanent disability (within the meaning of
Section 422 of the Code), the Option shall lapse at the
earlier of the end of the Option Period or twelve months
after the date of such termination; provided, however, the
Option may be exercised only for the number of Shares for
which it could have been exercised at the time the Optionee
became disabled, subject to any adjustment under Sections
7(d) and 13.
8. INCENTIVE STOCK OPTIONS. Any Options intended to qualify as an
Incentive Stock Option shall satisfy the following requirements in addition to
the other requirements of the Plan:
(a) TEN PERCENT SHAREHOLDERS. An Option intended to qualify as an
Incentive Stock Option granted to an individual who, on the
Date of Grant, owns stock possessing more than 10% of the
total combined voting power of all classes of stock of either
the Company or any parent or subsidiary, shall be granted at
a price of 110% of Fair Market Value on the Date of Grant and
shall be exercised only during the five-year period
immediately following the Date of Grant. In calculating stock
ownership of any person, the attribution rules of Section
425(d) of the Code will apply. Furthermore, in calculating
stock ownership, any stock that the individual may purchase
under outstanding options will not be considered.
(b) MAXIMUM OPTION GRANTS. The aggregate Fair Market Value,
determined on the Date of Grant, of stock in the Company
exercisable for the first time by any Optionee during any
calendar year, under the Plan and all other plans of the
Company or its parent or Subsidiaries (within the meaning of
Subsection (d) of Section 422 of the Code) in any calendar
year shall not exceed $100,000.00.
(c) EXERCISE OF INCENTIVE STOCK OPTIONS. No disposition of the
shares underlying an Incentive Stock Option may be made
within two years from the Date of Grant nor within one year
after the exercise of such Incentive Stock Option.
9. NONSTATUTORY OPTIONS. Any Option not intended to qualify as an
Incentive Stock Option shall be a Nonstatutory Option. Nonstatutory Options
shall satisfy each of the requirements
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<PAGE>
of Section 6 of the Plan, except the Nonstatutory Options may be granted at any
price at or above $1.50 per Share.
10. METHOD OF EXERCISE. An Option granted under this Plan shall be
deemed exercised when the person entitled to exercise the Option (i) delivers
written notice to the President of the Company of the decision to exercise, (ii)
concurrently tenders to the Company full payment for the Shares to be purchased
pursuant to the exercise, and (iii) complies with such other reasonable
requirements as the Committee establishes pursuant to paragraph 11 of the Plan.
During the lifetime of the Employee to whom an Option is granted, such Option
may be exercised only by him. Payment for Shares with respect to which an Option
is exercised may be in cash, or by certified check, or wholly or partially in
the form of Common Stock having a Fair Market Value equal to the aggregate
Option price. No Person will have the rights of a shareholder with respect to
Shares subject to an Option granted under this Plan until a certificate or
certificates for the Shares have been delivered to him.
An Option granted under this Plan may be exercised in increments of
not less than 10% of the full number of Shares as to which it can be exercised.
A partial exercise of an Option will not effect the holder's right to exercise
the Option from time to time in accordance with this Plan as to the remaining
Shares subject to the Option.
11. TAXES, COMPLIANCE WITH LAW; APPROVAL OF REGULATORY BODIES. The
Company, if necessary or desirable, may pay or withhold the amount of any tax
attributable to any Shares deliverable or amounts payable under this Plan, and
the Company may defer making delivery or payment until it is indemnified to its
satisfaction for the tax. Options are exercisable, and Shares can be delivered
and payments made under this Plan, only in compliance with all applicable
federal and state laws and regulations, including, without limitation, state and
federal securities laws, and the rules of all stock exchanges on which the
Company's stock is listed at any time. An Option is exercisable only if either
(i) a registration statement pertaining to the Shares to be issued upon exercise
of the Option has been filed with and declared effective by the Securities and
Exchange Commission and remains effective on the date of exercise, or (ii) an
exemption from the registration requirements of applicable securities laws is
available. This Plan does not require the Company, however, to file such
registration statement or to assure the availability of such exemptions. Any
certificate issued to evidence Shares issued under the Plan may bear such
legends and statements, and shall be subject to such transfer restrictions, as
the Committee deems advisable to assure compliance with federal and state laws
and regulations and with the requirements of Section 11 of the Plan. Each Option
may not be exercised, and Shares may not be issued under this Plan, until the
Company has obtained the consent or approval or every regulatory body, federal
or state, having jurisdiction over such matters as the Committee deems
advisable.
Each person who acquires the right to exercise an Option by bequest
or inheritance may be required by the Committee to furnish reasonable evidence
of ownership of the Option as a condition to his exercise of the Option. In
addition, the Committee may require such consents and release of taxing
authorities as the Committee deems advisable.
II-17
<PAGE>
12. ASSIGNABILITY. An Option granted under this Plan is not transferable
otherwise than by will or the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined by the Code or Title I of ERISA,
or the rules thereunder.
13. ADJUSTMENT UPON CHANGE OF SHARES. If a reorganization, merger,
consolidation, reclassification, recapitalization, combination or exchange of
share, stock split, stock dividend, rights offering, or other expansion or
contraction of the Common Stock of the Company occurs, the number and class of
Shares for which Options are authorized to be granted under this Plan, the
number and class of Shares then subject to Options previously granted under this
Plan, and the price per Share payable upon exercise of each Option outstanding
under this Plan shall be equitably adjusted by the Committee to reflect such
changes. To the extent deemed equitable and appropriate by the Board, subject to
any required action by shareholders, in any merger, consolidation,
reorganization, liquidation or dissolution, any Option granted under the Plan
shall pertain to the securities and other property to which a holder of the
number of Shares of stock covered by the Option would have been entitled to
receive in connection with such event.
14. LIABILITY OF THE COMPANY. The Company, its parent and any Subsidiary
that is in existence or hereafter comes into existence shall not be liable to
any person for any tax consequences expected but not realized by an Optionee or
other person due to the exercise of an Option.
15. EXPENSES OF PLAN. The Company shall bear the expenses of
administering the Plan.
16. DURATION OF PLAN. Options may be granted under this Plan only within
10 years from the effective date of this Plan.
17. APPLICABLE LAW. The validity, interpretation, and enforcement of
this Plan are governed in all respects by the laws of Delaware and the United
States of America.
18. EFFECTIVE DATE. The effective date of this Plan shall be March 23,
1995.
19. SECURITIES LAWS. The Plan and the administration of the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or any successor
regulation or statute adopted under the federal securities laws. To the extent
any provision of the Plan or action by the Board or the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
II-18
EXHIBIT 99.2
TELESCAN, INC.
AMENDED AND RESTATED
AMENDED STOCK OPTION PLAN
1. PURPOSE. The purpose of this Stock Option Plan (the "Plan") is to
further the interest of the company, its subsidiaries and its shareholders by
providing incentives in the form of stock options to key employees and directors
who contribute materially to the success and profitability of the Company. The
grants will recognize and reward outstanding individual performances and
contributions and will give such persons a proprietary interest in the Company,
thus enhancing their personal interest in the Company's continued success and
progress. This plan will also assist the Company and its subsidiaries in
attracting and retaining key employees and directors. The options granted under
this Plan may be either Incentive Stock Options, as that term is defined in
Section 422 of the Internal Revenue Code of 1986, as amended, or nonstatutory
options taxed under Section 83 of the Internal Revenue Code of 1986, as amended.
2. DEFINITIONS. The following definitions shall apply to this Plan:
(a) "Board" means the board of directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Committee" means the Compensation Committee of the Board
which shall consist of two or more directors of the Company
appointed by the Board.
(d) "Common Stock" means the Common Stock, par value $0.01 per
share of the Company or such other class of share or
securities as to which the Plan may be applicable, pursuant
to Section 12 herein.
(e) "Company" means Telescan, Inc., a Delaware corporation.
(f) "Continuous Service" means the absence of any interruption or
termination of employment with or service to the Company or
any parent or subsidiary of the Company that now exists or
hereafter is organized or acquired by or acquires the
Company. Continuous Service shall not be considered
interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Company or in the case
of transfers between locations of the Company or between the
Company, its parent, its subsidiaries or its successors.
(g) "Date of Grant" means the date on which the Committee grants
an Option.
(h) "Disinterested Person" means a disinterested person as
defined in Rule 16b-3, initially effective as of May 1, 1991,
promulgated under the Exchange Act,
II-19
<PAGE>
or any successor regulation or statute adopted under the
federal securities laws.
(i) "Exchange Act" means the Securities Exchange Act of 1934, as
amended.
(j) "Employee" means that any person employed on an hourly or
salaried basis by the Company or any parent or subsidiary of
the Company that now exists or hereafter is organized or
acquired by or acquires the Company.
(k) "Fair Market Value" means the fair market value of the Common
Stock on the Date of Grant. If the Common Stock is publicly
traded on the Date of Grant, the fair market value on that
date is the mean between the closing bid and ask prices of
the Common Stock as reported by the National Association of
Securities Dealer Automated Quotations ("NASDAQ") on that
date or, if the Common Stock is listed in other listing
services, the mean between the high and low sale prices of
the stock on that date, as reported in the Pink Sheets. If
trading in the stock or a price quotation does not occur on
the Date of Grant, the next preceding date on which the stock
was traded or a price was quoted will determine the fair
market value.
(l) "Incentive Stock Option" means a stock option, granted
pursuant to either this Plan or any other plan of the
Company, that satisfies the requirements of Section 422 of
the Code and that entitles the Optionee to purchase stock of
the Company or in a corporation that at the time of grant of
the option was a parent or subsidiary of the Company of or a
predecessor corporation of any such corporation.
(m) "Non-Employee Director" means any member of the Board who is
not an Employee.
(n) "Nonstatutory Option" shall have the meaning as used in
Section 9 herein.
(o) "Option" means a stock option granted pursuant to the Plan.
(p) "Option Period" means the period beginning on the Date of
Grant and ending on the day prior to the tenth anniversary of
the Date of Grant or such shorter termination date as set by
the Committee.
(q) "Optionee" means an Employee or Non-Employee Director who
receives an option.
(r) "Parent" means any corporation which owns 50% or more of the
voting securities of the Company.
(s) "Plan" means this Stock Option Plan.
II-20
<PAGE>
(t) "Share" means the Common Stock, as adjusted in accordance
with Section 13 of the Plan.
(u) "Subsidiary" means any corporation 50% or more of the voting
securities of which are owned directly or indirectly by the
Company at any time during the existence of this Plan.
3. ADMINISTRATION. This plan will be administered by the Committee. A
majority of the full Committee constitutes a quorum for purposes of
administering the Plan, and all determinations of the Committee shall be made by
a majority of the members present at a meeting at which a quorum is present or
by the unanimous, written consent of the Committee.
Each member of the Committee must be a Disinterested Person.
Accordingly, a member of the Committee shall not be granted or awarded Options
under the Plan and shall not be granted or awarded options, grants, awards or
other rights pursuant to any other plan of the Company or any of its affiliates
if a grant or award under such plan would cause such person not to be or to lose
his status as a Disinterested Person. If a member of the Committee ceases to be
a Disinterested Person for any reason, such person shall immediately, without
any action by the Board, cease to be a member of the Committee.
The Committee has the exclusive power to select the Employee
participants in this Plan, to establish the terms of the Options granted to each
Employee participant, and to make all other determinations necessary or
advisable under the plan. The Committee has the sole and absolute discretion to
determine whether the performance of an eligible Employee warrants an award
under this Plan, and to determine the amount of the award. The Committee has
full and exclusive power to construe and interpret this Plan, to prescribe and
rescind rules and regulations relating to this plan, and take all actions
necessary or advisable for the Plan's administration. Any such determination
made by the Committee will be final and binding on all persons. A member of the
Committee will not be liable for performing any act or making any determination
in good faith.
4. SHARES SUBJECT TO OPTION. Subject to the provisions of Section 13 of
the Plan, the maximum aggregate number of Shares that may be optioned and sold
under the Plan shall be 1,500,000. Such shares may be authorized but unissued,
or may be treasury shares. If an Option shall expire or become unexercisable for
any reason without having been exercised in full, the unpurchased Shares that
were subject to the Option shall, unless the plan has then terminated, be
available for other Options under the Plan.
5. EMPLOYEE PARTICIPATION.
(a) ELIGIBLE EMPLOYEES. Every Employee, as the Committee in its
sole discretion designates, is eligible to participate in
this Plan. The Committee's award of an Option to an Employee
in any year does not require the Committee to award an Option
to that Employee in any other year. Furthermore, the
Committee may award different Options to different
participants, the Committee may consider such factors as it
deems pertinent in selecting participants and in determining
the amount of their Option, including,
II-21
<PAGE>
without limitation: (i) the financial condition of the
Company or its Subsidiaries; (ii) expected profits for the
current or future years; (iii) the contributions of
prospective employees to the profitability and success of the
Company or its Subsidiaries; and (iv) the adequacy of the
Employee's other compensation. Employees may include persons
to whom stock, stock options, or other benefits previously
were granted under this or another plan of the Company or any
Subsidiary, whether or not the previously granted benefits
have been fully exercised.
(b) NO RIGHT OF EMPLOYMENT. An Optionee's right, if any, to
continue to serve the Company and its Subsidiaries as an
Employee will not be enlarged or otherwise affected by his
designation as a participant under this Plan, and such
designation will not in any way restrict the right of the
Company or any Subsidiary, as the case may be, to terminate
at any time the employment of any participant.
6. NON-EMPLOYEE DIRECTOR PARTICIPATION.
(a) GRANTS OF AWARDS. The Compensation Committee shall have full
discretion to grant Options to Non-Employee Directors at such
times as it deems appropriate, to determine the number of
shares of Common Stock underlying such Options, and to
determine the other terms and provisions thereof subject to
the other terms of the Plan.
(b) NON-TRANSFERABILITY. Each Option granted to Non-Employee
Directors by its term shall not be transferable by the
Optionee otherwise than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations
order as defined by the Code or Title I of ERISA, or the
rules thereunder, and shall be exercised during the lifetime
of the Optionee only by him. Except as set forth herein, no
Option granted to Non-Employee Directors or interest therein
may be transferred, assigned, pledged or hypothecated by the
Optionee during his lifetime, whether by operation of law or
otherwise, or be made subject to execution, attachment or
similar process.
7. OPTION REQUIREMENTS. Each Option granted under this Plan shall
satisfy the following requirements.
(a) WRITTEN OPTION. An Option shall be evidenced by a written
instrument specifying (i) the number of Shares that may be
purchased by its exercise, (ii) the intent of the Committee
as to whether the Option is to be an Incentive Stock Option
or a Nonstatutory Option, and (iii) such terms and conditions
consistent with the Plan as the Committee shall determine.
(b) DURATION OF OPTION. Each Option may be exercised only during
the Option Period designated for the Option by the Committee.
At the end of the Option Period the Option shall expire.
II-22
<PAGE>
(c) OPTION EXERCISABILITY. Unless otherwise provided by the
Committee on the grant of an Option, each Option shall be
exercisable only as to no more than one-fourth of the total
number of shares covered by the Option during each
twelve-month period commencing twelve months after the date
the Option is granted. Notwithstanding the foregoing, an
Option is exercisable only if the issuance of Shares pursuant
to the exercise would be in compliance with applicable
securities laws, as contemplated by Section 11 of this Plan.
To the extent an Option is either unexercisable or
unexercised, the unexercised portion shall accumulate until
the Option both becomes exercisable and is exercised but in
no case beyond the date that is ten years from the date the
Option is granted.
(d) ACCELERATION OF VESTING. Subject to the provisions of Section
6 and 9(b), the Board may, in its discretion, provide for the
exercise of Options either as to an increased percentage of
shares per year or as to all remaining shares. Such
acceleration of vesting may be declared by the Board at any
time before the end of the Option Period, including, if
applicable, after termination of the Optionee's Continuous
Service by reason of death, disability, retirement or
termination of employment.
(e) OPTION PRICE. Except as provided in Section 8(a) and 9, the
Option price of each Share subject to the Option shall equal
the Fair Market Value of the Share on the Option's Date of
Grant. Notwithstanding the preceding sentence or any other
provision hereof, no Option granted hereunder shall be at an
Option price less that $1.50 per share.
(f) TERMINATION OF SERVICES. If the Optionee ceases Continuous
Service for any reason other than death, disability, or
retirement on or after age of 65 of the Optionee, all Options
held by the Optionee shall lapse immediately following the
last day that the Optionee is employed by the Company, of the
effective date of the termination of his services to the
Company. On the grant of an Option, the Committee may, in its
discretion, extend the time during which the Option may be
exercised after termination of services. Any such option
shall lapse at the end of the period established by the
Committee for exercise after termination of services. The
Option may be exercised on such termination date, subject to
any adjustment under Section 7(d) and 13.
(g) DEATH. In the case of death of the Optionee, the
beneficiaries designated by the Optionee shall have one year
from the Optionee's demise or to the end of the Option
Period, whichever is earlier, to exercise the Option,
provided, however, the Option may be exercised only for the
number of Shares for which it could have been exercised at
the time the Optionee died, subject to any adjustment under
Section 7(b) and 13.
II-23
<PAGE>
(h) RETIREMENT. If the Optionee retires on or after attaining age
65, the Option shall lapse at the earlier of the end of the
Option Period or three months after the date of retirement;
provided, however, the Option can be exercised only for the
number of Shares for which it could have been exercised on
the retirement date, subject to any adjustment under Section
7(b) and 13.
(i) DISABILITY. In the event of termination of Continuous Service
due to total and permanent disability (within the meaning of
Section 422 of the Code), the Option shall lapse at the
earlier of the end of the Option Period or twelve months
after the date of such termination, provided, however, the
Option can be exercised at the time the Optionee became
disabled, subject to any adjustment under Sections 7(b) and
13.
8. INCENTIVE STOCK OPTIONS. Any Options intended to qualify as an
Incentive Stock Option shall satisfy the following requirements in addition to
the other requirements of the Plan:
(a) TEN PERCENT SHAREHOLDERS. An Option intended to qualify as an
Incentive Stock Option granted to an individual who, on the
Date of Grant, owns stock possessing more than ten (10)
percent of the total combined voting power of all classes of
stock of either the Company or any parent or subsidiary,
shall be granted at a price of 110 percent of Fair Market
Value on the Date of Grant and shall be exercised only during
the five-year period immediately following the Date of Grant.
In calculating stock ownership of any person, the attribution
rules of Section 425(d) of the Code will apply. Furthermore,
in calculating stock ownership, any stock that the individual
may purchase under outstanding options will not be
considered.
(b) MAXIMUM OPTION GRANTS. The aggregate Fair Market Value,
determined on the Date of Grant, of stock in the Company
exercisable for the first time by an Optionee during any
calendar year, under the Plan and all other plans of the
Company or its parent or Subsidiaries (within the meaning of
Subsection (d) of Section 422 of the Code) in any calendar
year shall not exceed $100,000.00.
9. NONSTATUTORY OPTIONS. Any Option not intended to qualify as an
Incentive Stock Option shall be a Nonstatutory Option. Nonstatutory Options
shall satisfy each of the requirements of Section 6 of the Plan, except the
Nonstatutory Options may be granted at any price at or above $1.50 per Share
designated by the Committee.
10. METHOD OF EXERCISE. An Option granted under this Plan shall be
deemed exercised when the person entitled to exercise the Option (i) delivers
written notice to the President of the Company of the decision to exercise, (ii)
concurrently tenders to the Company full payment for the Shares to be purchased
pursuant to the exercise, and (iii) complies with such other reasonable
requirements as the Committee establishes pursuant to paragraph 11 of the Plan.
During the lifetime of the Employee to whom an Option is granted, such Option
may be exercised only by him. Payment for Shares with respect to which an Option
is exercised may be in cash, or by certified check, or
II-24
<PAGE>
wholly or partially in the form of Common Stock having a fair market value equal
to the exercise price. No Person will have the rights of a shareholder with
respect to the Shares subject to an Option granted under this Plan until a
certificate or certificates for the Shares have been delivered to him.
An Option granted under this Plan may be exercised in increments of
not less than 10% of the full number of Shares as to which it can be exercised.
A partial exercise of an Option will not effect the holder's right to exercise
the Option from time to time in accordance with this Plan as to the remaining
Shares subject to the Option.
11. TAXES, COMPLIANCE WITH LAW; APPROVAL OF REGULATORY BODIES. The
Company, if necessary or desirable, may pay or withhold the amount of any tax
attributable to any Shares deliverable or amounts payable under this plan, and
the Company may defer making delivery or payment until it is indemnified to its
satisfaction for the tax. Options are exercisable, and Shares can be delivered
and payments made under this plan, only in compliance with all applicable
federal and state laws and regulations, including, without limitation, state and
federal securities laws, and the rules of all stock exchanges on which the
Company's stock is listed at any time. An Option is exercisable only if it is
either (i) a registration statement pertaining to the Shares to be issued upon
exercise of the Option has been filed with and declared effective by the
Securities and Exchange Commission and remains effective on the date of
exercise, or (ii) an exemption from the registration requirements of applicable
securities laws is available. This plan does not require the Company, however,
to file such registration statement or to assure the availability of such
exemptions. Any certificate issued to evidence Shares issued under the Plan may
bear such legends and statements, and shall be subject to such transfer
restrictions, as the Committee deems advisable to assure compliance with federal
and state laws and regulations and with the requirements of Section 10 of the
Plan. Each Option may not be exercised, and Shares may not be issued under this
Plan, until the Company has obtained the consent or approval or every regulatory
body, federal or state, having jurisdiction over such matters as the Committee
deems advisable.
Each person who acquires the right to exercise an Option by bequest
or inheritance may be required by the Committee to furnish reasonable evidence
to ownership of the Option as a condition to his exercise of the Option. In
addition, the Committee may require such consents and release of taxing
authorities as the Committee deems advisable.
12. ASSIGNABILITY. An Option granted under this Plan is not transferable
except by will or the laws of descent.
13. ADJUSTMENT UPON CHANGE OF SHARES. If a reorganization, merger,
consolidation, reclassification, recapitalization, combination or exchange of
share, stock split, stock dividend, rights offering, or other expansion or
contraction of the Common Stock of the Company occurs, the number and class of
Shares for which Options are authorized to be granted under this Plan, and the
price per Share payable upon exercise of each Option outstanding under this Plan
shall be equitably adjusted by the Committee to reflect such changes. To the
extent deemed equitable and appropriate by the Board, subject to any required
action by shareholders, in any merger, consolidation, reorganization,
liquidation or dissolution, any Option granted under the Plan shall pertain to
the securities and other property to which a holder of the number of Shares of
stock covered by the Option would have been entitled to receive in connection
with such event.
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<PAGE>
14. LIABILITY OF THE COMPANY. The Company, its parent and any Subsidiary
that is in existence or hereafter comes into existence shall not be liable to
any person for any tax consequences expected but not realized by an Optionee or
other person due to the exercise of an Option.
15. EXPENSES OF PLAN. The Company shall bear the expenses of
administering the Plan.
16. DURATION OF PLAN. Options may be granted under this Plan only within
10 years from the effective date of this Plan.
17. APPLICABLE LAW. The validity, interpretation, and enforcement of
this Plan are governed in all respects by the laws of Delaware and the United
States of America.
18. EFFECTIVE DATE. The effective date of this Plan shall be earlier of
(i) the date of which the Board adopts the Plan or (ii) the date on which the
Shareholders approve the Plan.
19. SECURITIES LAWS. The Plan and the administration of the Plan are
intended to comply with all applicable conditions of Rule 16b-3 or any successor
regulation or statute adopted under the federal securities laws. To the extent
any provision of the Plan or action by the Board or the Committee fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Committee.
II-26
