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EXHIBIT 99.1
RAPID LOGIC, INC.
1997 STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this 1997 Stock Option
Plan are to attract and retain the best available personnel for positions of
substantial responsibility, to provide additional incentive to Employees and
Consultants of the Company and its Subsidiaries and to promote the success of
the Company's business. Options granted under the Plan may be incentive stock
options (as defined under Section 422 of the Code) or nonstatutory stock
options, as determined by the Administrator at the time of grant of an option
and subject to the applicable provisions of Section 422 of the Code, as amended,
and the regulations promulgated thereunder.
2. DEFINITIONS. As used herein, the following definitions shall
apply:
(a) "ADMINISTRATOR" means the Board or any of its
Committees appointed pursuant to Section 4 of the Plan.
(b) "BOARD" means the Board of Directors of the
Company.
(c) "CODE" means the Internal Revenue Code of 1986, as
amended.
(d) "COMMITTEE" means the Committee appointed by the
Board of Directors in accordance with Section 4(a) of the Plan.
(e) "COMMON STOCK" means the Common Stock of the
Company.
(f) "COMPANY" means Rapid Logic, Inc., a Delaware
corporation.
(g) "CONSULTANT" means any person, including an
advisor, who is engaged by the Company or any Parent or Subsidiary to render
services and is compensated for such services, and any director of the Company
whether compensated for such services or not.
(h) "CONTINUOUS STATUS AS AN EMPLOYEE OR
CONSULTANT" means the absence of any interruption or termination of service
as an Employee or Consultant. Continuous Status as an Employee or Consultant
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
ninety (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) in the case of 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 Continuous Status as an Employee or Consultant.
(i) "EMPLOYEE" means any person, including officers
and directors, employed by the Company or any Parent or Subsidiary of the
Company, with the status of employment determined based upon such minimum number
of hours or periods worked as shall
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be determined by the Administrator in its discretion, subject to any
requirements of the Code. The payment of a director's fee to a Director shall
not be sufficient to constitute "employment" of such Director by the Company.
(j) "EXCHANGE ACT" means the Securities Exchange Act
of 1934, as amended.
(k) "FAIR MARKET VALUE" means, as of any date, the
fair market value of Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or a national market system including without
limitation the National Market of the National Association of Securities
Dealers, Inc. Automated Quotation ("NASDAQ") System, its Fair Market Value shall
be the closing sales price for such stock (or the closing bid, if no sales were
reported), as quoted on such system or exchange, or the exchange with the
greatest volume of trading in Common Stock for the last market trading day prior
to the time of determination, as reported in The Wall Street Journal or such
other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the
NASDAQ System (but not on the National Market thereof) or regularly quoted by a
recognized securities dealer but selling prices are not reported, its Fair
Market Value shall be the mean between the high bid and low asked prices for the
Common Stock for the last market trading day prior to the time of determination,
as reported in The Wall Street Journal or such other source as the Administrator
deems reliable; 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.
(l) "INCENTIVE STOCK 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.
(m) "NONSTATUTORY STOCK OPTION" means an Option not
intended to qualify as an Incentive Stock Option, as designated in the
applicable written option agreement.
(n) "OPTION" means a stock option granted pursuant to
the Plan.
(o) "OPTIONED STOCK" means the Common Stock subject to
an Option.
(p) "OPTIONEE" means an Employee or Consultant who
receives an Option.
(q) "PARENT" means a "PARENT CORPORATION," whether now
or hereafter existing, as defined in Section 424(e) of the Code, or any
successor provision.
(r) "PLAN" means this 1997 Stock Option Plan, as
amended.
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(s) "REPORTING PERSON" means an officer, director, or
greater than ten percent stockholder 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 under the Exchange Act.
(t) "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.
(u) "SHARE" means a share of the Common Stock, as
adjusted in accordance with Section 11 of the Plan.
(v) "STOCK EXCHANGE" means any stock exchange or
consolidated stock price reporting system on which prices for the Common Stock
are quoted at any given time.
(w) "SUBSIDIARY" means a "SUBSIDIARY CORPORATION,"
whether now or hereafter existing, as defined in Section 424(f) of the Code, or
any successor provision.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of shares that may be
optioned and sold under the Plan is 539,346 shares of Common Stock. The shares
may be authorized, but unissued, or reacquired Common Stock. If an 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 of Common Stock 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. Shares
repurchased by the Company pursuant to any repurchase right which the Company
may have shall not be available for future grant under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) INITIAL PLAN PROCEDURE. Prior to the date, if any,
upon which the Company becomes subject to the Exchange Act, the Plan shall be
administered by the Board or a committee appointed by the Board.
(b) PLAN PROCEDURE AFTER THE DATE, IF ANY, UPON WHICH
THE COMPANY BECOMES SUBJECT TO THE EXCHANGE ACT.
(i) MULTIPLE ADMINISTRATIVE BODIES. If
permitted by Rule 16b-3, grants under the Plan may be made by different bodies
with respect to directors, non-director officers and Employees or Consultants
who are not Reporting Persons.
(ii) ADMINISTRATION WITH RESPECT TO
REPORTING PERSONS. With respect to grants of Options to Employees who are
Reporting Persons, such grants shall be made by (A) the Board if the Board
may make grants to Reporting Persons under the Plan in compliance with Rule
16b-3, or (B) a committee designated by the Board to make grants to Reporting
Persons under the Plan, which committee shall be constituted in such a manner
as to permit grants under the Plan to comply with Rule 16b-3. Once appointed,
such committee shall continue to serve in its designated capacity until
otherwise directed by the Board. From time to
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time the Board may increase the size of the committee and appoint additional
members thereof, remove members (with or without cause) and appoint new members
in substitution therefor, fill vacancies, however caused, and remove all members
of the committee and thereafter directly make grants to Reporting Persons under
the Plan, all to the extent permitted by Rule 16b-3.
(iii) ADMINISTRATION WITH RESPECT TO
CONSULTANTS AND OTHER EMPLOYEES. With respect to grants of Options to
Employees or Consultants who are not Reporting Persons, the Plan shall be
administered by (A) the Board or (B) a committee designated by the Board,
which committee shall be constituted in such a manner as to satisfy the legal
requirements relating to the administration of incentive stock option plans,
if any, of California corporate and securities laws, of the Code and of any
applicable Stock Exchange (the "Applicable Laws"). Once appointed, such
Committee shall continue to serve in its designated capacity until otherwise
directed by the Board. From time to time the Board may increase the size of
the Committee and appoint additional members thereof, remove members (with or
without cause) and appoint new members in substitution therefor, fill
vacancies, however caused, and remove all members of the Committee and
thereafter directly administer the Plan, all to the extent permitted by the
Applicable Laws.
(c) POWERS OF THE ADMINISTRATOR. Subject to the
provisions of the Plan and in the case of a Committee, the specific duties
delegated by the Board to such Committee, and subject to the approval of any
relevant authorities, including the approval, if required, of any Stock
Exchange, the Administrator shall have the authority, in its discretion:
(i) to determine the Fair Market Value of
the Common Stock, in accordance with Section 2(k) of the Plan;
(ii) to select the Consultants and Employees
to whom Options may from time to time be granted hereunder;
(iii) to determine whether and to what extent
Options or any combination thereof are granted hereunder;
(iv) to determine the number of shares of
Common Stock to be covered by each such option granted hereunder;
(v) to approve forms of agreement for use
under the Plan;
(vi) to determine the terms and conditions,
not inconsistent with the terms of the Plan, of any option granted hereunder;
(vii) to determine whether and under what
circumstances an Option may be settled in cash under Section 9(f) instead of
Common Stock;
(viii) to reduce the exercise price of any
Option to the then current Fair Market Value if the Fair Market Value of the
Common Stock covered by such Option shall have declined since the date the
Option was granted;
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(ix) to construe and interpret the terms of
the Plan and Options granted under the Plan; and
(x) in order to fulfill the purposes of the
Plan and without amending the Plan, to modify grants of Options to participants
who are foreign nationals or employed outside of the United States in order to
recognize differences in local law, tax policies or customs.
(d) EFFECT OF ADMINISTRATOR'S DECISION. All decisions,
determinations and interpretations of the Administrator shall be final and
binding on all holders of Options.
5. ELIGIBILITY.
(a) RECIPIENTS OF GRANTS. Nonstatutory Stock Options
may be granted to Employees and Consultants. Incentive Stock Options may be
granted only to Employees. An Employee or Consultant who has been granted an
Option may, if he or she is otherwise eligible, be granted additional Options.
(b) TYPE OF OPTION. Each Option shall be designated in
the written option agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designations, to the
extent that the aggregate Fair Market Value of the Shares with respect to which
Options designated as Incentive Stock Options are exercisable for the first time
by any Optionee during any calendar year (under all plans of the Company or any
Parent or Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 5(b), Incentive Stock
Options shall be taken into account in the order in which they were granted, and
the Fair Market Value of the Shares subject to an Incentive Stock Option shall
be determined as of the date of the grant of such Option.
(c) EMPLOYMENT RELATIONSHIP. The Plan shall not confer
upon any Optionee any right with respect to continuation of employment or
consulting relationship with the Company, nor shall it interfere in any way with
such Optionee's right or the Company's right to terminate his or her employment
or consulting relationship at any time, with or without cause.
6. TERM OF PLAN. The Plan shall become effective upon the
earlier to occur of its adoption by the Board of Directors or its approval by
the stockholders of the Company as described in Section 18 of the Plan. It shall
continue in effect for a term of ten (10) years unless sooner terminated under
Section 14 of the Plan.
7. TERM OF OPTION. The term of each Option shall be the term
stated in the Option Agreement; provided, however, that the term shall be no
more than ten (10) years from the date of grant thereof or such shorter term as
may be provided in the Option Agreement. However, in the case of an Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the total combined voting power of
all classes of stock of the Company or any Parent or Subsidiary, the term of the
Option shall be five (5) years from the date of grant thereof or such shorter
term as may be provided in the Option Agreement.
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8. OPTION EXERCISE PRICE AND CONSIDERATION.
(a) The per share exercise price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is determined by
the Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
that is:
(A) granted to an Employee who, at
the time of the grant of such Incentive Stock Option, owns stock representing
more than ten percent (10%) of the total combined voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share exercise price
shall be no less than 110% of the Fair Market Value per Share on the date of
grant.
(B) granted to any Employee, the
per Share exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
(ii) In the case of a Nonstatutory Stock
Option that is:
(A) granted to a person who, at
the time of the grant of such Option, owns stock representing more than ten
percent (10%) of the total combined voting power of all classes of stock of the
Company or any Parent or Subsidiary, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of the grant.
(B) granted to any person, the per
Share exercise price shall be no less than 85% of the Fair Market Value per
Share on the date of grant.
(b) The consideration to be paid for the Shares to
be issued upon exercise of an Option, including the method of payment, shall
be determined by the Administrator (and, in the case of an Incentive Stock
Option, shall be determined at the time of grant) and may consist entirely of
(1) cash, (2) check, (3) promissory note, (4) other Shares that (x) in the
case of Shares acquired upon exercise of an Option, have been owned by the
Optionee for more than six months on the date of surrender or such other
period as may be required to avoid a charge to the Company's earnings, and
(y) have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Shares as to which such Option shall be exercised, (5)
authorization for the Company to retain from the total number of Shares as to
which the Option is exercised that number of Shares having a Fair Market
Value on the date of exercise equal to the exercise price for the total
number of Shares as to which the Option is exercised, (6) delivery of a
properly executed exercise notice together with such other documentation as
the Administrator and the broker, if applicable, shall require to effect an
exercise of the Option and delivery to the Company of the sale or loan
proceeds required to pay the exercise price and any applicable income or
employment taxes, (7) delivery of an irrevocable subscription agreement for
the Shares that irrevocably obligates the option holder to take and pay for
the Shares not more than twelve months after the date of delivery of the
subscription agreement, (8) any combination of the foregoing methods of
payment, or (9) such other consideration and method of payment for the
issuance of Shares to the extent permitted under Applicable Laws. In making
its determination as to the type of consideration to accept, the
Administrator shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
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9. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE; RIGHTS AS A STOCKHOLDER.
Any Option granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator, including performance criteria
with respect to the Company and/or the Optionee, and as shall be permissible
under the terms of the Plan; provided that such Option shall become exercisable
at the rate of at least twenty percent (20%) per year over five (5) years from
the date the Option is granted.
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 Board, consist of any
consideration and method of payment allowable under Section 8(b) 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 stockholder shall exist with respect to the Optioned Stock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such 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 11 of the Plan.
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.
(b) TERMINATION OF EMPLOYMENT OR CONSULTING
RELATIONSHIP. Subject to Section 9(c), in the event of termination of an
Optionee's Continuous Status as an Employee or Consultant with the Company, such
Optionee may, but only within ninety (90) days (or such other period of time not
less than thirty (30) days as is determined by the Administrator, with such
determination in the case of an Incentive Stock Option being made at the time of
grant of the Option and not exceeding ninety (90) days) after the date of such
termination (but in no event later than the expiration date of the term of such
Option as set forth in the Option Agreement), exercise his or her Option to the
extent that the Optionee was entitled to exercise it at the date of such
termination. To the extent that Optionee was not entitled to exercise the Option
at the date of such termination, or if Optionee does not exercise such Option to
the extent so entitled within the time specified herein, the Option shall
terminate. No termination shall be deemed to occur and this Section 9(b) shall
not apply if (i) the Optionee is a Consultant who becomes an Employee; or (ii)
the Optionee is an Employee who becomes a Consultant.
(c) DISABILITY OF OPTIONEE.
(i) Notwithstanding Section 9(b) above, in
the event of termination of an Optionee's Continuous Status as an Employee or
Consultant as a result of his or her total and permanent disability (within the
meaning of Section 22(e)(3) of the Code), Optionee may, but
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only within twelve (12) months from the date of such termination (but in no
event later than the expiration date of the term of such Option as set forth in
the Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. To the extent that Optionee was not
entitled to exercise the Option at the date of termination, or if Optionee does
not exercise such Option to the extent so entitled within the time specified
herein, the Option shall terminate.
(ii) In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of a
disability which does not fall within the meaning of total and permanent
disability (as set forth in Section 22(e)(3) of the Code), Optionee may, but
only within six (6) months from the date of such termination (but in no event
later than the expiration date of the term of such Option as set forth in the
Option Agreement), exercise the Option to the extent otherwise entitled to
exercise it at the date of such termination. However, to the extent that such
Optionee fails to exercise an Option which is an Incentive Stock Option ("ISO")
(within the meaning of Section 422 of the Code) within ninety (90) days of the
date of such termination, the Option will not qualify for ISO treatment under
the Code. To the extent that Optionee was not entitled to exercise the Option at
the date of termination, or if Optionee does not exercise such Option to the
extent so entitled within six months (6) from the date of termination, the
Option shall terminate.
(d) DEATH OF OPTIONEE. In the event of the death of an
Optionee during the period of Continuous Status as an Employee or Consultant
since the date of grant of the Option, or within thirty (30) days following
termination of Optionee's Continuous Status as an Employee or Consultant, the
Option may be exercised, at any time within six (6) months following the date of
death (but in no event later than the expiration date of the term of such Option
as set forth in the Option Agreement), by Optionee's estate or by a person who
acquired the fight to exercise the Option by bequest or inheritance, but only to
the extent of the right to exercise that had accrued at the date of death or, if
earlier, the date of termination of Optionee's Continuous Status as an Employee
or Consultant. To the extent that Optionee was not entitled to exercise the
Option at the date of death or termination, as the case may be, or if Optionee
does not exercise such Option to the extent so entitled within the time
specified herein, the Option shall terminate.
(e) 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.
(f) 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 Optionee at the time that such offer is made.
10. STOCK WITHHOLDING TO SATISFY WITHHOLDING TAX OBLIGATIONS. At
the discretion of the Administrator, Optionees may satisfy withholding
obligations as provided in this paragraph. When an Optionee incurs tax liability
in connection with an Option, which tax liability is subject to tax withholding
under applicable tax laws, and the Optionee is obligated to pay the Company an
amount required to be withheld under applicable tax laws, the Optionee may
satisfy the withholding tax obligation by one or some combination of the
following
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methods: (a) by cash payment, or (b) out of Optionee's current compensation, (c)
if permitted by the Administrator, in its discretion, by surrendering to the
Company Shares that (i) in the case of Shares previously acquired from the
Company, have been owned by the Optionee for more than six months on the date of
surrender, and (ii) have a fair market value on the date of surrender equal to
or less than Optionee's marginal tax rate times the ordinary income recognized,
or (d) by electing to have the Company withhold from the Shares 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").
Any surrender by a Reporting Person of previously owned Shares to
satisfy tax withholding obligations arising upon exercise of this Option must
comply with the applicable provisions of Rule 16b-3.
All elections by an Optionee to have Shares 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:
(a) the election must be made on or prior to the
applicable Tax Date;
(b) once made, the election shall be irrevocable as to
the particular Shares of the Option as to which the election is made; and
(c) all elections shall be subject to the consent or
disapproval of the Administrator.
In the event the election to have Shares withheld is made by an
Optionee 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 Optionee shall receive
the full number of Shares with respect to which the Option is exercised but such
Optionee shall be unconditionally obligated to tender back to the Company the
proper number of Shares on the Tax Date.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION, MERGER OR CERTAIN
OTHER TRANSACTIONS.
(a) CHANCES IN CAPITALIZATION. Subject to any required
action by the stock-holders of the Company, the number of shares of Common Stock
covered by each outstanding Option, and the number of shares of Common Stock
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, as well as the price per share of Common Stock
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
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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 of Common Stock subject to an Option.
(b) DISSOLUTION OR LIQUIDATION. In the event of the
proposed dissolution or liquidation of the Company, the Board shall notify the
Optionee at least fifteen (15) days prior to such proposed action. To the extent
it has not been previously exercised, the Option will terminate immediately
prior to the consummation of such proposed action.
(c) MERGER OR SALE OF ASSETS. In the event of a
proposed sale of all or substantially all of the Company's assets or a merger
of the Company with or into another corporation where the successor
corporation issues its securities to the Company's stockholders, each
outstanding Option shall be assumed or an equivalent option or fight shall be
substituted by such successor corporation or a parent or subsidiary of such
successor corporation, unless the successor corporation does not agree to
assume the Option or to substitute an equivalent option, in which case such
Option shall terminate upon the consummation of the merger or sale of assets.
(d) CERTAIN DISTRIBUTIONS. In the event of any
distribution to the Company's stockholders of securities of any other entity or
other assets (other than dividends payable in cash or stock of the Company)
without receipt of consideration by the Company, the Administrator may, in its
discretion, appropriately adjust the price per share of Common Stock covered by
each outstanding Option to reflect the effect of such distribution.
12. NON-TRANSFERABILITY OF OPTIONS. Options may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised or
purchased during the lifetime of the Optionee only by the Optionee.
13. TIME OF GRANTING OPTIONS. The date of grant of an Option
shall, for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by the
Board; provided however that in the case of any Incentive Stock Option, the
grant date shall be the later of the date on which the Administrator makes the
determination granting such Incentive Stock Option or the date of commencement
of the Optionee's employment relationship with the Company. Notice of the
determination shall be given to each Employee or Consultant to whom an Option is
so granted within a reasonable time after the date of such grant.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AUTHORITY TO AMEND OR TERMINATE. The Board may at
any time amend, alter, suspend or discontinue the Plan, but no amendment,
alteration, suspension or discontinuation shall be made that would impair the
rights of any Optionee under any grant theretofore made, without his or her
consent. In addition, to the extent necessary and desirable to comply with Rule
16b-3 or with Section 422 of the Code (or any other applicable law or
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regulation, including the requirements of any Stock Exchange), the Company shall
obtain stockholder approval of any Plan amendment in such a manner and to such a
degree as required.
(b) EFFECT OF AMENDMENT OR TERMINATION. No amendment
or termination of the Plan shall adversely affect Options already granted,
unless mutually agreed otherwise between the Optionee and the Board, which
agreement must be in writing and signed by the Optionee and the Company.
15. CONDITIONS UPON ISSUANCE 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, and the requirements of any Stock Exchange.
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.
16. 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.
17. AGREEMENTS. Options shall be evidenced by written agreements
in such form as the Administrator shall approve from time to time.
18. STOCKHOLDER APPROVAL. Continuance of the Plan shall be
subject to approval by the stockholders of the Company within twelve (12) months
before or after the date the Plan is adopted. Such stockholder approval shall be
obtained in the degree and manner required under applicable state and federal
law and the rules of any Stock Exchange upon which the Common Stock is listed.
All Options issued under the Plan shall become void in the event such approval
is not obtained.
19. INFORMATION AND DOCUMENTS TO OPTIONEES. The Company shall
provide financial statements at least annually to each Optionee during the
period such Optionee has one or more Options outstanding, and in the case of an
individual who acquired Shares pursuant to the Plan, during the period such
individual owns such Shares. The Company shall not be required to provide such
information if the issuance of Options under the Plan is limited to key
employees whose duties in connection with the Company assure their access to
equivalent information. In addition, at the time of issuance of any securities
under the Plan, the Company shall provide to the Optionee a copy of the Plan and
a copy of any agreement(s) pursuant to which securities granted under the Plan
are issued.
11.
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