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EXHIBIT 99.3
ATLANTECH TECHNOLOGIES LIMITED
1998 STOCK OPTION PLAN
1. PURPOSE. The purpose of this 1998 Stock Option Plan (the
"Plan") is to encourage employees of Atlantech Technologies Limited (the
"Company") and of any present or future parent or subsidiary of the Company
(collectively, "Related Corporations"), and other individuals who render
services to the Company or a Related Corporation, by providing opportunities to
purchase stock in the Company pursuant to options granted hereunder which
qualify as "incentive stock options" ("ISOs") under Section 422(b) of the
Internal Revenue Code of 1986, as amended (the "Code") and options which do not
qualify as ISOs ("Non-Qualified Options"). Both ISOs and Non-Qualified Options
are referred to hereafter individually as an "Option" and collectively as
"Options." As used herein, the terms "parent" and "subsidiary" mean "parent
corporation" and "subsidiary corporation," respectively, as those terms are
defined in Section 424 of the Code.
2. ADMINISTRATION OF THE PLAN.
A. BOARD OR COMMITTEE ADMINISTRATION. The Plan shall be
administered by the Board of Directors of the Company (the "Board") or,
subject to paragraph 2(D) (relating to compliance with Section 162(m) of
the Code), by a committee appointed by the Board (the "Committee").
Hereinafter, all references in this Plan to the "Committee" shall mean
the Board if no Committee has been appointed. Subject to ratification of
the grant or authorization of each Option by the Board (if so required
by applicable state law), and subject to the terms of the Plan, the
Committee shall have the authority to (i) determine to whom (from among
the class of employees eligible under paragraph 3 to receive ISOs) ISOs
shall be granted, and to whom (from among the class of individuals and
entities eligible under paragraph 3 to receive Non-Qualified Options)
Non-Qualified Options may be granted; (ii) determine the time or times
at which Options shall be granted; (iii) determine the exercise price of
shares subject to each Option, which price shall not be less than the
minimum price specified in paragraph 6; (iv) determine whether each
Option granted shall be in ISO or a Non-Qualified Option; (v) determine
(subject to paragraph 7) the time or times when each Option shall become
exercisable and the duration of the exercise period; (vi) extend the
period during which outstanding Options may be exercise; (vii) determine
whether restrictions such as repurchase options are to be imposed on
shares subject to Options and the nature of such restriction, if any;
and (viii) interpret the Plan and prescribe and rescind rules and
regulations relating to it. If the Committee determines to issue a
Non-Qualified Option, it shall take whatever actions it deems necessary,
under Section 422 of the Code and the regulations promulgated
thereunder, to ensure that such Option is not treated as an ISO. The
interpretation and construction by the Committee of any provisions of
the Plan or of any Option granted under it shall be final unless
otherwise determined by the Board. The Committee may from time to time
adopt such rules and regulations for carrying out the Plan as it may
deem advisable. No member of the Board or the Committee shall be liable
for any action
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or determination made in good faith with respect to the Plan or any Option
granted under it.
B. COMMITTEE ACTIONS. The Committee may select one of its members as its
chairman, and shall hold meetings at such time and places as it may determine. A
majority of the Committee shall constitute a quorum and acts by a majority of
the members of the Committee at a meeting at which a quorum is present, or acts
reduced to or approved in writing by a majority of the members of the Committee
(if consistent with applicable state law), shall constitute the valid acts of
the Committee. 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, or remove all members of the Committee and thereafter directly
administer the Plan.
C. GRANT OF OPTIONS TO BOARD MEMBERS. Subject to the provisions of the
first sentence of paragraph 2(A) above, if applicable, Options may be granted to
members of the Board. All grants of Options to members of the Board shall in all
respects be made in accordance with the provisions of this Plan applicable to
other eligible persons. Consistent with the provisions of the first sentence of
paragraph 2(A) above, members of the Board who either (i) are eligible to
receive grants of Options pursuant to the Plan or (ii) have been granted Options
may vote on any matters affecting the administration of the Plan or the grant of
any Options pursuant to the Plan, except that no such member shall act upon the
granting to himself or herself of Options, but any such member may be counted in
determining the existence of a quorum at any meeting of the Board during which
action is taken with respect to the granting to such member of Options.
D. PERFORMANCE-BASED COMPENSATION. The Board, in its discretion, may take
such action as may be necessary to ensure that Options granted under the Plan
qualify as "qualified performance-based compensation" within the meaning of
Section 162(m) of the Code and applicable regulations promulgated thereunder
("Performance-Based Compensation"). Such action may include, in the Board's
discretion, some or all of the following (i) if the Board determines that
Options granted under the Plan generally shall constitute Performance-Based
Compensation, the Plan shall be administered, to the extent required for such
Options to constitute Performance-Based Compensation, by a Committee consisting
solely of two or more "outside directors" (as defined in applicable regulations
promulgated under Section 162(m) of the Code), (ii) if any Non-Qualified Options
with an exercise price less than the fair market value per share of Ordinary
Shares are granted under the Plan and the Board determines that such Options
should constitute Performance-Based Compensation, such options shall be made
exercisable only upon the attainment of a pre-established, objective performance
goal established by the Committee, and such grant shall be submitted for, and
shall be contingent upon shareholder approval and (iii) Options granted under
the Plan may be subject to such other terms and conditions as are necessary for
compensation recognized in connection with the exercise or disposition of such
Stock Right or the disposition of Ordinary Shares acquired pursuant to such
Stock Right, to constitute Performance-Based Compensation.
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3. ELIGIBLE EMPLOYEES AND OTHERS. ISOs may be granted only to employees
of the Company or any Related Corporation. Non-Qualified Options may be granted
to any employee, officer or director (whether or not also an employee) or
consultant of the Company or any Related Corporation. The Committee may take
into consideration a recipient's individual circumstances in determining
whether to grant an ISO or a Non-Qualified Option. The granting of any Option
to any individual or entity shall neither entitle that individual or entity to,
nor disqualify such individual or entity from, participation in any other grant
of Options.
4. STOCK. The stock subject to Options shall be Ordinary Shares of the
Company, par value (L)0.01 per share (the "Ordinary Shares"). The aggregate
number of shares which may be issued pursuant to the Plan is 1,115,962 shares
less the total number of Ordinary Shares that (i) have been issued to employees
of the Company pursuant to the exercise of options granted outside of this Plan
or (ii) have been reserved for issuance to employees pursuant to the exercise
of options granted to employees of the Company outside of this Plan, all of
such numbers of shares subject to adjustments as provided in paragraph 13. If
any Option granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part or shall be repurchased by the Company, the
shares subject to such Option shall again be available for grants of Options
under the Plan.
No employee of the Company or any Related Corporation may be granted
Options to acquire, in the aggregate, more than 70% of the total shares
reserved under the Plan during any fiscal year of the Company. If any Option
granted under the Plan shall expire or terminate for any reason without having
been exercised in full or shall cease for any reason to be exercisable in whole
or in part or shall be repurchased by the Company, the shares subject to such
Option shall be included in the determination of the aggregate number of shares
of Ordinary Shares deemed to have been granted to such employee under the Plan.
5. GRANTING OF OPTIONS. Options may be granted under the Plan at any time
after April 30, 1998 and prior to April 29, 2008. The date of grant of an
Option under the Plan will be the date specified by the Committee at the time
it grants the Option; provided, however, that such date shall not be prior to
the date on which the Committee acts to approve the grant.
6. MINIMUM OPTION PRICE; ISO LIMITATIONS.
A. PRICE FOR NON-QUALIFIED OPTIONS. Subject to Paragraph 2(D)
(relating to compliance with Section 162(m) of the Code), the exercise price
per share specified in the agreement relating to each Non-Qualified Option
granted under the Plan may be less than the fair market value of the Ordinary
Shares of the Company on the date of grant; provided that in no event shall
such exercise price be less than the minimum legal consideration required
therefor under the laws of any jurisdiction in which the Company or its
successors in interest may be organized.
B. PRICE FOR ISOs. The exercise price per share specified in the
agreement relating to each ISO granted under the Plan shall not be less than
the fair market value per
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Ordinary Share on the date of such grant. In the case of an ISO to be
granted to an employee owning stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company
or any Related Corporation, the price per share specified in the agreement
relating to such ISO shall not be less than one hundred ten percent (110%)
of the fair market value per share of Ordinary Shares on the date of
grant. For purposes of determining stock ownership under this paragraph,
the rules of Section 424(d) of the Code shall apply. The date of grant for
purposes of this subparagraph shall mean the date that the Company or
Related Corporation completes the corporate action constituting an offer
of stock for sale to an individual.
C. $100,000 ANNUAL LIMITATION ON ISO VESTING. Each eligible employee
may be granted Options treated as ISOs only to the extent that, in the
aggregate under this Plan and all incentive stock option plans of the
Company and any Related Corporation, ISOs do not become exercisable for
the first time by such employee during any calendar year with respect to
stock having a fair market value (determined at the time the ISOs were
granted) in excess of $100,000. The Company intends to designate any
Options granted in excess of such limitation as Non-Qualified Options, and
the Company shall issue separate certificates to the optionee with respect
to Options that are Non-Qualified Options and Option that are ISOs.
D. DETERMINATION OF FAIR MARKET VALUE. If at the time an Option is
granted under the Plan, the Company's Ordinary Shares are publicly traded,
"fair market value" shall be determined as of the date of grant or if the
prices or quotes discussed in this sentence are unavailable for such date,
the last business day for which such prices or quotes are available prior
to the date of grant and shall mean (i) the average (on that date) of the
high and low prices of the Ordinary Shares on the principal national
securities exchange on which the Ordinary Shares are traded, if the
Ordinary Shares are then traded on a national securities exchange; or (ii)
the last reported sale price (on that date) of the Ordinary Shares on the
Nasdaq National Market, if the Ordinary Shares are not then traded on a
national securities exchange; or (iii) the closing bid price (or average
of bid prices) last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Ordinary Shares are not
reported on the Nasdaq National Market. If the Ordinary Shares are not
publicly traded at the time an Option is granted under the Plan, "fair
market value" shall be deemed to be the fair value of the Ordinary Shares
as determined by the Committee after taking into consideration all factors
which it deems appropriate, including, without limitation, recent sale
and offer prices of the Ordinary Shares in private transactions negotiated
at arm's length.
7. OPTION DURATION. Subject to earlier termination as provided in
paragraphs 9 and 10 or in the agreement relating to such Option, each Option
shall expire on the date specified by the Committee, but not more than (i) ten
years from the date of grant in the case of Options generally and (ii) five
years from the date of grant in the case of ISOs granted to an employee owning
stock possessing more than ten percent (10%) of the total combined voting power
of all classes of stock of the Company or any Related Corporation, as determined
under paragraph 6(B). Subject to earlier termination as provided in paragraphs 9
and 10, the term of
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each ISO shall be the term set forth in the original instrument granting such
ISO, except with respect to any part of such ISO that is converted into a
Non-Qualified Option pursuant to paragraph 16.
8. EXERCISE OF OPTION. Subject to the provisions of paragraphs 9 through
12, each Option granted under the Plan shall be exercisable as follows:
A. VESTING. The Option shall either be fully exercisable on the date
of grant or shall become exercisable thereafter in such installments as
the Committee may specify.
B. FULL VESTING OF INSTALLMENTS. Once an installment becomes
exercisable it shall remain exercisable until expiration or termination of
the Option, unless otherwise specified by the Committee.
C. PARTIAL EXERCISE. Each Option or installment may be exercised at
any time or from time to time, in whole or in part, for up to the total
number of shares with respect to which it is then exercisable.
D. ACCELERATION OF VESTING. The Committee shall have the right to
accelerate the date on which any installment of any Option becomes
exercisable; provided that the Committee shall not, without the consent of
an optionee, accelerate the permitted exercise date of any installment of
any Option granted to any employee as an ISO (and not previously converted
into a Non-Qualified Option pursuant to paragraph 16) if such acceleration
would violate the annual vesting limitation contained in Section 422(d) of
the Code, as described in paragraph 6(C).
9. TERMINATION OF EMPLOYMENT. Unless otherwise specified in the agreement
relating to such Option, if an optionee ceases to be employed by the Company
and all Related Corporations other than by reason of death or disability as
defined in paragraph 10, no further installments of his or her Options shall
become exercisable, and his or her Options shall terminate immediately upon the
termination of his or her employment, but in no event later than on their
specified expiration dates. For purposes of this paragraph 9, employment shall
be considered as continuing uninterrupted during any bona fide leave of absence
(such as those attributable to illness, military obligations or governmental
service) provided that the period of such leave does not exceed 90 days or, if
longer, any period during which such optionee's right to reemployment is
guaranteed by statute or by contract. A bona fide leave of absence with the
written approval of the Committee shall not be considered as an interruption of
employment under this paragraph 9, provided that such written approval
contractually obligates the Company or any Related Corporation to continue the
employment of the optionee after the approved period of absence. Options
granted under the Plan shall not be affected by any change of employment within
or among the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related Corporation. Nothing
in the Plan shall be deemed to give any optionee the right to be retained in
employment or other service by the Company or any Related Corporation for any
period of time.
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10. DEATH; DISABILITY.
A. DEATH. If an optionee ceases to be employed by the Company and
all Related Corporations by reason of his or her death, any Option owned by
such optionee may be exercised, to the extent otherwise exercisable on the
date of death, by the estate, personal representative or beneficiary who
has acquired the Option by will or by the laws of descent and distribution,
until the earlier of (i) the specified expiration date of the Option or
(ii) 180 days from the date of the optionee's death.
B. DISABILITY. If an optionee ceases to be employed by the Company
and all Related Corporations by reason of his or her disability, such
optionee shall have the right to exercise any Option held by him or her on
the date of termination of employment, to the extent of the number of
shares with respect to which he or she could have exercised it on that
date, until the earlier of (i) the specified expiration date of the Option
or (ii) 180 days from the date of the termination of the optionee's
employment. For the purposes of the Plan, the term "disability" shall mean
"permanent and total disability" as defined in Section 22(e)(3) of the
Code or any successor statute.
11. ASSIGNABILITY. No ISO shall be assignable or transferable by the
optionee except by will, by the laws of descent and distribution, and during
the lifetime of an optionee each Option shall be exercisable only by such
optionee. Non-Qualified Options shall be transferable to the extent set forth in
the agreement relating thereto.
12. TERMS AND CONDITIONS OF OPTIONS. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may contain such
other provisions as the Committee deems advisable which are not inconsistent
with the Plan, including restrictions applicable to shares of Ordinary Shares
are usable upon exercise of Options. The Committee may specify that any
Non-Qualified Option shall be subject to the restrictions set forth herein with
respect to ISOs, or to such other termination and cancellation provisions as
the Committee may determine. The Committee may from time to time confer
authority and responsibility on one or more of its own members and/or one or
more officers of the Company to execute and deliver such instruments. The
proper officers of the Company are authorized and directed to take any and all
action necessary or advisable from time to time to carry out the terms of such
instruments. The exercise price per share for each Option may be denominated in
United States dollars, pounds sterling, or any other currency approved by the
Committee.
13. ADJUSTMENTS. Upon the occurrence of any of the following events, an
optionee's rights with respect to Options granted to such optionee hereunder
shall be adjusted as hereinafter provided, unless otherwise specifically
provided in the written agreement between the optionee and the Company relating
to such Option:
A. STOCK DIVIDENDS AND STOCK SPLITS. If the shares of Ordinary
Shares shall be subdivided or combined into a greater or smaller number of
shares or if the Company
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shall issue any shares or Ordinary Shares as a stock dividend on its outstanding
Ordinary Shares, the number of shares of Ordinary Shares deliverable upon the
exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
B. CONSOLIDATIONS OR MERGERS. If the Company is to be consolidated with
or acquired by another entity in a merger or other reorganization in which the
holders of the outstanding voting stock of the Company immediately preceding the
consummation of such event, shall, immediately following such event, hold, as a
group, less than a majority of the voting securities of the surviving or
successor entity, or in the event of a sale of all or substantially all of the
Company's assets or otherwise (each, an "Acquisition"), the Committee or the
board of directors of any entity assuming the obligations of the Company
hereunder (the "Successor Board"), shall, as to outstanding Options, make
appropriate provision for the continuation of such Options by substituting on
an equitable basis for the shares then subject to such Options either (a) the
consideration payable with respect to the outstanding shares or Ordinary Shares
in connection with the Acquisition, (b) shares of stock of the surviving or
successor corporation or (c) such other securities as the Successor Board deems
appropriate, the fair market value of which shall not materially exceed the fair
market value of the shares or Ordinary Shares subject to such Options
immediately preceding the Acquisition.
C. RECAPITALIZATION OR REORGANIZATION. In the event of a recapitalization
or reorganization of the Company (other than a transaction described in
subparagraph B above) pursuant to which securities of the Company or of another
corporation are issued with respect to the outstanding shares of Ordinary
Shares, an optionee upon exercising an Option shall be entitled to receive for
the purchase price paid upon such exercise the securities he or she would have
received if he or she had exercised such Option prior to such recapitalization
or reorganization.
D. MODIFICATION OF ISOs. Notwithstanding the foregoing, any adjustments
made pursuant to subparagraphs A, B or C with respect to ISOs shall be made only
after the Committee, after consulting with counsel for the Company, determines
whether such adjustments would constitute a "modification" of such ISOs (as that
term is defined in Section 424 of the Code) or would cause any adverse tax
consequences for the holders of such ISOs. If the Committee determines that such
adjustments made with respect to ISOs would constitute a modification of such
ISOs or would cause adverse tax consequences to the holders, it may refrain from
making such adjustments. Upon the initial exercise of Options granted under the
Plan, the optionee shall, if requested by the Company, sign a Deed of Adherence
to any existing Shareholders' Agreement among the Shareholders of the Company.
E. DISSOLUTION OR LIQUIDATION. In the event of the proposed dissolution
or liquidation of the Company, each Option will terminate immediately prior to
the
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consummation of such proposed action or at such other time and subject to
such other conditions as shall be determined by the Committee.
F. ISSUANCES OF SECURITIES. Except as expressly provided herein,
no issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no
adjustment by reason thereof shall be made with respect to, the number or
price of shares subject to Options. No adjustments shall be made for
dividends paid in cash or in property other than securities of the
Company.
G. FRACTIONAL SHARES. No fractional shares shall be issued under
the Plan and the optionee shall receive from the Company cash in lieu of
such fractional shares.
H. ADJUSTMENTS. Upon the happening of any of the events described
in subparagraphs A, B or C above, the class and aggregate number of shares
set forth in paragraph 4 hereof that are subject to Options which
previously have been or subsequently may be granted under the Plan shall
also be appropriately adjusted to reflect the events described in such
subparagraphs. The Committee or the Successor Board shall determine the
specific adjustments to be made under this paragraph 13 and, subject to
paragraph 2, its determination shall be conclusive.
14. MEANS OF EXERCISING OPTIONS. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address, or to such transfer agent as the Company shall
designate. Such notice shall identify the Option being exercised and specify the
number of shares as to which such Option is being exercised, accompanied by full
payment of the purchase price therefor either (a) in the designated currency in
cash or by check, (b) at the discretion of the Committee, by delivery of the
optionee's personal recourse note bearing interest payable not less than
annually at no less than 100% of the lowest applicable Federal rate, as defined
in Section 1274(d) of the Code, (c) at the discretion of the Committee and
consistent with applicable law, through the delivery of an assignment to the
Company of a sufficient amount of the proceeds from the sale of the Ordinary
Shares acquired upon exercise of the Option and an authorization to the broker
or selling agent to pay that amount to the Company, which sale shall be at the
participant's direction at the time of exercise, or (d) at the discretion of the
Committee, by any combination of (a), (b) and (c) above. If the Committee
exercises its discretion to permit payment of the exercise price of an ISO by
means of the methods set forth in clauses (b), (c) or (d) of the preceding
sentence, such discretion shall be exercised in writing at the time of the grant
of the ISO in question. The holder of an Option shall not have the rights of a
shareholder with respect to the shares covered by his Option until the date of
issuance of a stock certificate to such holder for such shares. Except as
expressly provided above in paragraph 13 with respect to changes in
capitalization and stock dividends, no adjustment shall be made for dividends or
similar rights for which the record date is before the date such stock
certificate is issued.
15. TERM AND AMENDMENT OF PLAN. This Plan was adopted by the Board on
April 29, 1998, subject, with respect to the validation of ISOs granted under
the Plan, to approval of the Plan by the stockholders of the Company at the next
Meeting of Stockholders or, in lieu
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thereof, by written consent. If the approval of stockholders is not obtained
prior to April 29, 1999, any grants of ISOs under the Plan made prior to that
date will be rescinded. The Plan shall expire at the end of the day on April
29, 2008 (except as to Options outstanding on that date). Subject to the
provisions of paragraph 5 above, Options may be granted under the Plan prior to
the date of stockholder approval of the Plan. The Board may terminate or amend
the Plan in any respect at any time, except that, without the approval of the
stockholders obtained within 12 months before or after the Board adopts a
resolution authorizing any of the following actions: (a) the total number of
shares that may be issued under the Plan may not be increased (except by
adjustment pursuant to paragraph 13); (b) the provisions of paragraph 3
regarding eligibility for grants of ISOs may not be modified; (c) the
provisions of paragraph 6(B) regarding the exercise price at which shares may
be offered pursuant to ISOs may not be modified (except by adjustment pursuant
to paragraph 13) and (d) the expiration date of the Plan may not be extended.
Except as otherwise provided in this paragraph 15, in no event may action of
the Board or stockholders alter or impair the rights of an optionee, without
such optionee's consent, under any Option previously granted to such optionee.
16. CONVERSION OF ISOs INTO NON-QUALIFIED OPTIONS. Subject to
paragraph 13(D), without the prior written consent of the holder of an ISO, the
Committee shall not alter the terms of such ISO (including the means of
exercising such ISO) if such alteration would constitute a modification (within
the meaning of Section 424(h)(3) of the Code). The Committee, at the written
request or with the written consent of any optionee, may in its discretion take
such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but shall not be limited to, extending the exercise period
or reducing the exercise price of the appropriate installments of such ISOs. At
the time of such conversion, the Committee (with the consent of the optionee)
may impose such conditions on the exercise of the resulting Non-Qualified
Options as the Committee in its discretion may determine, provided that such
conditions shall not be inconsistent with this Plan. Nothing in the Plan shall
be deemed to give any optionee the right to have such optionee's ISOs converted
into Non-Qualified Options, and no such conversion shall occur until and unless
the Committee takes appropriate action. Upon the taking of such action the
Company shall issue separate certificates to the optionee with respect to
Options that are Non-Qualified Options and Options that are ISOs.
17. APPLICATION OF FUNDS. The proceeds received by the Company from
the sale of shares pursuant to Options granted under the Plan shall be used for
general corporate purposes.
18. NOTICE TO COMPANY OF DISQUALIFYING DISPOSITION. By accepting an
ISO granted under the Plan, each optionee agrees to notify the Company in
writing immediately after such optionee makes a Disqualifying Disposition (as
described in Sections 421, 422 and 424 of the Code and regulations thereunder)
of any stock acquired pursuant to the exercise of ISOs granted under the Plan.
A Disqualifying Disposition is generally and disposition occurring on or before
the later of (a) the date two years following the date the ISO was granted or
(b) the date one year following the date the ISO was exercised.
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19. WITHHOLDING OF ADDITIONAL INCOME TAXES. Upon the exercise of a
Non-Qualified Option, the transfer of a Non-Qualified Stock Option pursuant to
an arm's length transaction, the making of a Disqualifying Disposition (as
defined in paragraph 18), the vesting or transfer of restricted stock or
securities acquired on the exercise of a Option hereunder, or the making of a
distribution or other payment with respect to such stock or securities, the
Company may withhold taxes in respect of amounts that constitute compensation
includible in gross income. The Committee in its discretion may condition (i)
the exercise of an Option (ii) the transfer of a Non-Qualified Stock Option, or
(iii) the vesting or transferability of restricted stock or securities acquired
by exercising an Option, on the optionee's making satisfactory arrangement for
such withholding. Such arrangement may include payment by the optionee in cash
or by check of the amount of the withholding taxes or, at the discretion of the
Committee, by the optionee's delivery of previously held shares of Ordinary
Shares or the withholding from the shares of Ordinary Shares otherwise
deliverable upon exercise of a Option shares having an aggregate fair market
value equal to the amount of such withholding taxes.
20. GOVERNMENTAL REGULATION. The Company's obligation to sell and
delivery shares of the Ordinary Shares under this Plan is subject to the
approval of any governmental authority required in connection with the
authorization, issuance or sale of such shares.
Government regulations may impose reporting or other obligations on the
Company with respect to the Plan. For example, the Company may be required to
send tax information statements to employees and former employees that exercise
ISOs under the Plan, and the Company may be required to file tax information
returns reporting the income received by optionees in connection with the Plan.
21. GOVERNING LAW. The validity and construction of the Plan and the
instruments evidencing Options shall be governed by the laws of Scotland, or
the laws of any jurisdiction in which the Company or its successors in interest
may be organized.
