<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 13, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------------------
FORM S-8
REGISTRATION STATEMENT
Under
-----
The Securities Act of 1933
--------------------------
---------------------------------------
CELL THERAPEUTICS, INC.
(Exact name of Registrant as specified in its charter)
---------------------------------------
WASHINGTON 91-1533912
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
201 ELLIOTT AVENUE WEST, SUITE 400
SEATTLE, WASHINGTON 98119
(Address of principal executive offices) (Zip code)
----------------------------------------
CELL THERAPEUTICS, INC.
1994 EQUITY INCENTIVE PLAN
(Full title of the Plan)
-----------------------------------------
JAMES A. BIANCO
PRESIDENT AND CHIEF EXECUTIVE OFFICER
CELL THERAPEUTICS, INC.
201 ELLIOTT AVENUE WEST, SUITE 400
SEATTLE, WASHINGTON 98119
(206) 282-7100
(Telephone number, including area code, of agent for service)
---------------------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================
Proposed Proposed
Title of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Offering Registration
Registered Registered(1) per Share(2) Price(2) Fee
- ---------------------------------- ----------------- ------------ ---------- ------------
<S> <C> <C> <C> <C>
1994 EQUITY INCENTIVE PLAN
- ----------------------------------
Options to purchase
Common Stock, no par value
(including associated
Preferred Stock Purchase Rights) 1,500,000 N/A N/A N/A
Common Stock, no par value
(including associated
Preferred Stock Purchase Rights) 1,500,000 shares $2.4063 $3,609,450 $1,064.79
Aggregate Filing Fee $1,064.79
=============================================================================================
</TABLE>
(1) This Registration Statement shall also cover any additional shares of Common
Stock which become issuable under the Registrant's 1994 Equity Incentive
Plan by reason of any stock dividend, stock split, recapitalization or any
other similar transaction without receipt of consideration which results in
an increase in the number of outstanding shares of Common Stock of Cell
Therapeutics, Inc.
(2) Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(h) of the Securities Act of 1933, as amended, based
upon the average of the high and low prices of the Company's Common Stock as
reported on the Nasdaq National Market on July 7, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
---------------------------------------
Cell Therapeutics, Inc. (the "Registrant") hereby incorporates by reference
into this Registration Statement the following documents previously filed with
the Securities and Exchange Commission (the "SEC"):
(a) The Registrant's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997, filed with the SEC on March 31, 1998;
(b) The Registrant's Quarterly Report on Form 10-Q for the fiscal quarter
ended March 31, 1998, filed with the SEC on May 15, 1998; and
(c) The Registrant's Registration Statement on Form 10 filed with the SEC on
April 29, 1996 (as amended on June 27, 1996 and June 28, 1996) and the
Registrant's Registration Statement on Form 8-A filed with the SEC on
November 15, 1996.
All reports and definitive proxy or information statements filed pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 (the
"1934 Act") after the date of this Registration Statement and prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all securities then remaining unsold
shall be deemed to be incorporated by reference into this Registration Statement
and to be a part hereof from the date of filing of such documents. Any
statement contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Registration Statement to the extent that a statement contained herein or
in any subsequently filed document which also is deemed to be incorporated by
reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES
-------------------------
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
--------------------------------------
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
-----------------------------------------
Sections 23B.08.500 through 23B.08.600 of the Washington Business Corporation
Act (the "WBCA") authorize a court to award, or a corporation's board of
directors to grant, indemnification to directors and officers on terms
sufficiently broad to permit indemnification under certain circumstances for
liabilities arising under the Securities Act of 1933, as amended (the
"Securities Act"). Article IX of the Registrant's Restated Bylaws (Exhibit 3.7
hereto) provides for indemnification of the Registrant's directors, officers,
employees and agents to the maximum extent permitted by Washington law. The
directors and officers of the Registrant also may be indemnified against
liability they may incur for serving in such capacity pursuant to a liability
insurance policy maintained by the Company for such purpose.
II-2
<PAGE>
Section 23B.08.320 of the WBCA authorizes a corporation to limit a director's
liability to the corporation or its shareholders for monetary damages for acts
or omissions as a director, except in certain circumstances involving
intentional misconduct, knowing violations of law or illegal corporate losses or
distributions, or any transaction from which the director personally receives a
benefit in money, property or services to which the director is not legally
entitled. Article VI of the Registrant's Restated Articles of Incorporation
contains provisions implementing, to the fullest extent permitted by Washington
law, such limitations on a director's liability to the Registrant and its
shareholders.
The Registrant has entered into an indemnification agreement with each of its
executive officers and directors in which the Registrant agrees to hold harmless
and indemnify the officer or director to the fullest extent permitted by
Washington law. The Registrant agrees to indemnify the officer or director
against any and all losses, claims, damages, liabilities or expenses incurred
in connection with any actual, pending or threatened action, suit, claim or
proceeding, whether civil, criminal, administrative or investigative and whether
formal or informal, in which the officer or director is, was or becomes involved
by reason of the fact that the officer or director is or was a director,
officer, employee, trustee or agent of the Registrant or any related company,
partnership or enterprise, including service with respect to an employee benefit
plan, whether the basis of such proceeding is alleged action (or inaction) by
the officer or director in an official capacity and any action, suit, claim or
proceeding instructed by or at the direction of the officer or director unless
such action, suit, claim or proceeding is or was authorized by the Registrant's
Board of Directors. No indemnity pursuant to the indemnification agreements
shall be provided by the Registrant on account of any suit in which a final,
unappealable judgment is rendered against the officer or director for an
accounting of profits made from the purchase or sale by the officer or director
of securities of the Registrant in violation of the provisions of Section 16(b)
of the Securities Exchange Act of 1934, as amended, and amendments thereto, or
for damages that have been paid directly to the officer or director by an
insurance carrier under a policy of directors' and officers' liability insurance
maintained by the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
-----------------------------------
Not applicable.
ITEM 8. EXHIBITS
--------
Exhibit No. Exhibit
- ----------- -------
4.1 Registrant's Restated Articles of Incorporation (incorporated by
reference to exhibits to the Registrant's Registration Statement
on Form S-1, No. 33-4154).
4.2 Registrant's Restated Bylaws (incorporated by reference to
exhibits to the Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 1996, filed on November
14, 1996).
4.3 Specimen Common Stock Certificate (incorporated by reference to
exhibits to the Registrant's Registration Statement on Form 10
filed on April 29, 1996 (as amended on June 27, 1996 and June 28,
1996)).
4.4 Form of Rights Agreement dated as of November 11, 1996, between
the Registrant and Harris Trust Company of California, which
includes the Form of Rights Certificate as Exhibit A, the Summary
of Rights to Purchase Preferred Stock as Exhibit B and the Form
of Certificate of Designation of the Series C Preferred Stock as
Exhibit C (incorporated by reference to exhibits to the
Registrant's Registration Statement on Form 8-A filed on November
15, 1996).
5 Opinion and Consent of Davis Wright Tremaine LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Davis Wright Tremaine LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this
Registration Statement.
99.1 Registrant's 1994 Equity Incentive Plan.
II-3
<PAGE>
Item 9. Undertakings
------------
A. The undersigned Registrant hereby undertakes: (1) to file, during any
period in which offers or sales are being made, a post-effective amendment to
this Registration Statement (i) to include any prospectus required by Section
10(a)(3) of the Securities Act, (ii) to reflect in the prospectus any facts or
events arising after the effective date of this Registration Statement (or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in this
Registration Statement, and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in this
Registration Statement or any material change to such information in this
Registration Statement; provided, however, that clauses (1)(i) and (1)(ii) shall
--------
not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by the
Registrant pursuant to Section 13 or Section 15(d) of the 1934 Act that are
incorporated by reference into this Registration Statement; (2) that for the
purpose of determining any liability under the 1933 Act, each such post-
effective amendment shall be deemed to be a new registration statement relating
to the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof; and (3) to
remove from registration by means of a post-effective amendment any of the
securities being registered which remain unsold upon the termination of the
Registrant's 1994 Equity Incentive Plan.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the 1933 Act, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the 1934 Act that is
incorporated by reference into this Registration Statement shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
C. Insofar as indemnification for liabilities arising under the 1933 Act may
be permitted to directors, officers or controlling persons of the Registrant
pursuant to the indemnity provisions summarized in Item 6 or otherwise, the
Registrant has been informed that in the opinion of the SEC such indemnification
is against public policy as expressed in the 1933 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the 1933 Act and will be governed by the final
adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, 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 Seattle, State of Washington on July 10, 1998.
CELL THERAPEUTICS, INC.
By: /s/ JAMES A. BIANCO, M.D.
-------------------------------------
James A. Bianco, M.D.
President and Chief Executive Officer
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That the undersigned officers and directors of Cell Therapeutics, Inc., a
Washington corporation, do hereby constitute and appoint James A. Bianco and
Louis A. Bianco and each of them, the lawful attorneys-in-fact and agents, each
with full power of substitution or resubstitution, with full power and authority
to do any and all acts and things and to execute any and all instruments which
said attorneys and agents, or either one of them, determine may be necessary or
advisable or required to enable said corporation to comply with the Securities
Act of 1933, as amended, and any rules or regulation or requirements of the
Securities and Exchange Commission in connection with this Registration
Statement. Without limiting the generality of the foregoing power and
authority, the powers granted include the power and authority to sign the names
of the undersigned officers and directors in the capacities indicated below to
this Registration Statement, to any and all amendments, both pre-effective and
post-effective, and supplements to this Registration Statement and to any and
all instruments or documents filed as part of or in conjunction with this
Registration Statement or amendments or supplements thereto, and each of the
undersigned hereby ratifies and confirms all that said attorneys and agents, or
either one of them, shall do or cause to be done by virtue hereof. This Power
of Attorney may be signed in several counterparts.
IN WITNESS WHEREOF, each of the undersigned has executed this Power of
Attorney as of the date indicated.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ MAX E. LINK PH.D. Chairman of the Board and Director July 10, 1998
- -------------------------------------
Max E. Link, Ph.D.
/s/ JAMES A. BIANCO, M.D. President, Chief Executive Officer
- ------------------------------------- and Director (Principal Executive Officer) July 10, 1998
James A. Bianco, M.D.
</TABLE>
II-5
<PAGE>
<TABLE>
<CAPTION>
Signatures Title Date
- ---------- ----- ----
<S> <C> <C>
/s/ LOUIS A. BIANCO Executive Vice President, July 10, 1998
- ------------------------------------- Finance and Administration ----
Louis A. Bianco (Principal Financial Officer and
Principal Accounting Officer)
/s/ JACK W. SINGER, M.D. Director July 10, 1998
- ------------------------------------- ---
Jack W. Singer, M.D.
/s/ JACK L. BOWMAN Director July 10, 1998
- ------------------------------------- ---
Jack L. Bowman
/s/ JEREMY L. CURNOCK COOK Director July 10, 1998
- ------------------------------------- ---
Jeremy L. Curnock Cook
/s/ WILFRED E. JAEGER, M.D. Director July 10, 1998
- ------------------------------------- ---
Wilfred E. Jaeger, M.D.
/s/ TERRENCE M. MORRIS Director July 10, 1998
- ------------------------------------- ---
Terrence M. Morris
/s/ MARY O'NEIL MUNDINGER, D.P.H. Director July 10, 1998
- ------------------------------------- ---
Mary O'Neil Mundinger, D.P.H.
/s/ PHILLIP M. NUDELMAN, PH.D. Director July 10, 1998
- ------------------------------------- ---
Phillip M. Nudelman, Ph.D.
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Exhibit
------- -------
4.1 Registrant's Restated Articles of Incorporation (incorporated by
reference to exhibits to the Registrant's Registration Statement
on Form S-1, No. 33-4154).
4.2 Registrant's Restated Bylaws (incorporated by reference to
exhibits to the Registrant's Quarterly Report on Form 10-Q for
the fiscal quarter ended September 30, 1996, filed on November
14, 1996).
4.3 Specimen Common Stock Certificate (incorporated by reference to
exhibits to the Registrant's Registration Statement on Form 10
filed on April 29, 1996 (as amended on June 27, 1996 and June 28,
1996)).
4.4 Form of Rights Agreement dated as of November 11, 1996, between
the Registrant and Harris Trust Company of California, which
includes the Form of Rights Certificate as Exhibit A, the Summary
of Rights to Purchase Preferred Stock as Exhibit B and the Form
of Certificate of Designation of the Series C Preferred Stock as
Exhibit C (incorporated by reference to exhibits to the
Registrant's Registration Statement on Form 8-A filed on November
15, 1996).
5 Opinion and Consent of Davis Wright Tremaine LLP.
23.1 Consent of Ernst & Young LLP, Independent Auditors.
23.2 Consent of Davis Wright Tremaine LLP is contained in Exhibit 5.
24 Power of Attorney. Reference is made to page II-5 of this
Registration Statement.
99.1 Registrant's 1994 Equity Incentive Plan.
<PAGE>
EXHIBIT 5
July 10, 1998
Cell Therapeutics, Inc.
201 Elliott Avenue West
Suite 400
Seattle, WA 98119
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters described
below relating to an additional 1,500,000 shares of common stock (the "Common
Stock") of Cell Therapeutics, Inc. (the "Company") to be issued pursuant to the
exercise of options issued under the Company's 1994 Equity Incentive Plan (As
Amended and Restated May 11, 1998) (the "Option Plan") pursuant to the
Registration Statement on Form S-8 (the "Registration Statement") filed by the
Company on this date with the Securities and Exchange Commission.
As special local Washington counsel for the Company and in connection
with the opinions expressed below, we have examined copies of (a) the
Registration Statement and (b) the originals, or copies identified to our
satisfaction, of such corporate records of the Company, certificates of public
officials, officers of the Company and other persons, and such other documents,
agreements and instruments as we have deemed necessary as a basis for the
opinions hereinafter expressed. In our examinations, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals and the conformity with the originals of all documents submitted
to us as copies. In expressing the opinions set forth below, we have also relied
on certain certificates of officers of the Company and certificates of public
officials.
Our opinions expressed below are limited to the laws of the State of
Washington.
Subject to the foregoing, we are of the opinion that the shares of
Common Stock, when issued and sold pursuant to the applicable provisions of the
Option Plan and in accordance with the Registration Statement will be legally
and validly issued, fully paid and nonassessable.
<PAGE>
Cell Therapeutics, Inc.
July 10, 1998
Page 2
We hereby consent to the use of this opinion letter as an exhibit to the
Registration Statement.
Very truly yours,
DAVIS WRIGHT TREMAINE LLP
<PAGE>
EXHIBIT 23.1
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statement (Form
S-8) pertaining to the Cell Therapeutics, Inc. 1994 Equity Incentive Plan of our
report dated February 13, 1998 with respect to the consolidated financial
statements of Cell Therapeutics, Inc. included in the Annual Report on Form 10-K
of Cell Therapeutics, Inc. for the year ended December 31, 1997, filed with the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Seattle, Washington
July 10, 1998
<PAGE>
Exhibit 99.1
CELL THERAPEUTICS, INC.
1994 EQUITY INCENTIVE PLAN
(As Amended and Restated May 11, 1998)
1. PURPOSE. The purpose of this 1994 Equity Incentive Plan (the
"Plan") is to enable Cell Therapeutics, Inc., a Washington corporation (the
"Company"), to attract and retain the services of (a) selected employees,
officers and directors of the Company or of any parent or subsidiary corporation
of the Company, (b) non-employee members of the Company's Board of Directors and
(c) other selected non-employee agents, consultants, advisers and independent
contractors of the Company or any parent or subsidiary (together, "Eligible
Persons").
2. SHARES SUBJECT TO THE PLAN. Subject to adjustment as provided
below and in paragraph 11, up to 3,836,715 shares of the Company's Common Stock
(inclusive of the 1,500,000-share increase authorized by the Board on May 11,
1998 and approved by the shareholders at the Company's 1998 annual meeting of
shareholders), plus such shares of Common Stock for which options previously
granted under the Company's 1992 Stock Option Plan may expire, terminate or be
cancelled (the "Shares") shall be offered and issued under the Plan. To the
fullest extent permitted under Rule 16b-3 under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), (a) if an option or a stock appreciation
right granted under the Plan expires, terminates or is cancelled, the unissued
Shares subject to such option or stock appreciation right shall again be
available under the Plan, and (b) if Shares sold under the Plan are forfeited to
the Company or repurchased by the Company at the purchase price paid per share,
the number of Shares forfeited or repurchased shall again be available under the
Plan. In accordance with the requirements of Section 162(m) of the Code, no
eligible employee shall receive stock options, separately exercisable stock
appreciation rights and direct stock awards for more than 233,671 shares in the
aggregate per calendar year under the Plan.
3. EFFECTIVE DATE AND DURATION OF PLAN.
(a) Effective Date. The Plan shall become effective when adopted
by the Board of Directors of the Company (the "Board") and approved by the
affirmative vote of the holders of a majority of the Common Stock of the Company
represented at a shareholder meeting at which a quorum is present. Options and
stock appreciation rights may be granted and Shares may be awarded as bonuses or
sold under the Plan at any time after the effective date and before termination
of the Plan.
(b) Duration. No options or stock appreciation rights may be
granted under the Plan, no stock bonuses may be awarded under the Plan, and no
Shares may be sold pursuant to paragraph 8 of the Plan on or after January 1,
2004. However, the Plan shall continue in effect until all Shares available for
issuance under the Plan have been issued and all restrictions on such Shares
have lapsed. The Board may suspend or terminate the Plan at any time, except
with respect to options, stock appreciation rights and Shares subject to
restrictions
A-1
<PAGE>
then outstanding under the Plan. Termination shall not affect any outstanding
options, stock appreciation rights, any right of the Company to repurchase
Shares or the forfeitability of Shares issued under the Plan.
4. ADMINISTRATION.
(a) The Plan shall be administered by a committee appointed by the
Board consisting of not less than two directors (the "Committee"). The
Committee shall determine and designate from time to time the Eligible Persons
to whom awards shall be made, the amount of the awards, and the other terms and
conditions of the awards; provided, however, that only the Board may amend or
-------- -------
terminate the Plan as provided in paragraphs 3 and 15. At any time when the
officers and directors of the Company are subject to Section 16(b) of the
Exchange Act, the Committee shall consist solely of "non-employee directors" as
such term is defined from time to time in Rule 16b-3 under the Exchange Act. In
addition, at any time when the Company is subject to Section 162(m) of the Code,
the Committee shall consist solely of "outside directors", as defined in the
regulations promulgated pursuant to Section 162(m) of the Code.
Notwithstanding the provisions of this Section 4(a) and Section 4(b) below, all
discretionary actions to be taken with respect to the options granted to Non-
Employee Directors pursuant to Section 10 below shall be made by the Board.
(b) Subject to the provisions of the Plan, the Committee may from
time to time adopt and amend rules and regulations relating to administration of
the Plan, advance the lapse of any waiting period, accelerate any exercise date,
waive or modify any restriction applicable to Shares (except those restrictions
imposed by law) and make all other determinations in the judgment of the
Committee necessary or desirable for the administration of the Plan. The
interpretation and construction of the provisions of the Plan and related
agreements by the Committee shall be final and conclusive. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any related agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect, and it shall be the sole and final
judge of such expediency.
5. TYPES OF AWARDS; ELIGIBILITY. The Committee may, from time to
time, take the following actions under the Plan: (i) grant Incentive Stock
Options, as defined in Section 422 of the Code, as provided in paragraph 6(b);
(ii) grant options other than Incentive Stock Options ("Nonstatutory Stock
Options") as provided in paragraph 6(c); (iii) award stock bonuses as provided
in paragraph 7; (iv) sell Shares as provided in paragraph 8; and (v) grant stock
appreciation rights as provided in paragraph 9. Any such awards may be made to
employees (including employees who are officers or directors of the Company or
of any parent or subsidiary corporation of the Company, and to other Eligible
Persons described in paragraph 1 who the Committee believes have made or will
make an important contribution to the Company or its parent or subsidiaries;
provided, however, that only employees of the Company or a parent or subsidiary
- -------- -------
shall be eligible to receive Incentive Stock Options under the Plan. The
Committee shall select the Eligible Persons to whom awards shall be made and
shall specify the action taken with respect to each Eligible Person to whom an
award is made under the Plan. At the discretion
A-2
<PAGE>
of the Committee, an Eligible Person may be given an election to surrender an
award in exchange for the grant of a new award.
6. OPTION GRANTS
(a) Grant. Each option granted under the Plan shall be evidenced
by a stock option agreement in such form as the Committee shall prescribe from
time to time in accordance with the Plan. With respect to each option grant, the
Committee shall determine the number of Shares subject to the option, the option
price, the period of the option, and the time or times at which the option may
be exercised and whether the option is an Incentive Stock Option or a
Nonstatutory Stock Option.
(b) Incentive Stock Options. Incentive Stock Options granted under
the Plan shall be subject to the following terms and conditions:
(i) No employee may be granted Incentive Stock Options under
the Plan such that the aggregate fair market value, on the date of grant, of the
Shares with respect to which Incentive Stock Options are exercisable for the
first time by that employee during any calendar year under the Plan and under
any other incentive stock option plan (within the meaning of Section 422 of the
Code) of the Company or of any parent or subsidiary corporation of the Company
exceeds $100,000.
(ii) An Incentive Stock Option may be granted under the Plan
to an employee possessing more than 10 percent of the total combined voting
power of all classes of stock of the Company or of any parent or subsidiary
corporation of the Company only if the option price is at least 110 percent of
the fair market value, as described in paragraph 6(b)(iv), of the Shares subject
to the option on the date it is granted, and the option by its terms is not
exercisable more than five years from the date of grant.
(iii) Subject to paragraphs 6(b)(ii) and 6(d), Incentive Stock
Options granted under the Plan shall continue in effect for the period fixed by
the Committee, except that no Incentive Stock Option shall be exercisable more
than 10 years from the date of grant.
A-3
<PAGE>
(iv) The option price per Share shall be determined by the
Committee at the time of grant. Subject to paragraph 6(b)(ii), the option price
shall not less than 100 percent of the fair market value of the Shares covered
by the Incentive Stock Option at the date the option is granted. The fair market
value shall be fixed by the Committee at whatever price the Committee may
determine in the exercise of its sole discretion; provided, that the per share
--------
exercise price for any option granted following the effective date of
registration of any of the Company's securities under Section 12 of the Exchange
Act shall be deemed to be the average of the closing bid and asked prices for
the Common Stock of the Company as reported on the National Association of
Securities Dealers, Inc. Automated Quotation System on the day preceding the day
the option is granted, or if there has been no sale on that date, on the last
preceding date on which a sale occurred, or such other reported value of the
Common Stock of the Company as shall be specified by the Committee.
(v) The Committee may at any time without the consent of the
optionee convert an Incentive Stock Option into a Nonstatutory Stock Option.
(c) Nonstatutory Stock Options. Nonstatutory Stock Options shall
be subject to the following additional terms and conditions:
(i) The option price for Nonstatutory Stock Options shall be
determined by the Committee at the time of grant. The option price may not be
less than the fair market value of the Shares covered by the Nonstatutory Stock
Option on the date of grant. The fair market value of the Shares covered by a
Nonstatutory Stock Option shall be determined pursuant to paragraph 6(b)(iv).
(ii) Nonstatutory Stock Options granted under
the Plan shall continue in effect for the period fixed by the Committee.
(d) Exercise of Options. Except as provided in paragraph 6(f) or
as determined by the Committee, no option granted under the Plan may be
exercised unless at the time of such exercise the optionee is employed by or in
the service of the Company or any parent or subsidiary corporation of the
Company and shall have been so employed or have provided such service
continuously since the date such option was granted. Absence on leave or on
account of illness or disability under rules established by the Committee shall
not, however, be deemed an interruption of employment for purposes of the Plan.
Unless otherwise determined by the Committee, vesting of options shall not
continue during an absence on leave (including an extended illness) or on
account of disability. Except as provided in paragraphs 6(f), 11 and 13, options
granted under the Plan may be exercised from time to time over the period stated
in each option in such amounts and at such times as shall be prescribed by the
Committee; provided that options shall not be exercised for fractional shares.
--------
Unless otherwise determined by the Committee, if the optionee does not exercise
an option in any one year with respect to the full number of Shares to which the
optionee is entitled in that year, the optionee's right shall be cumulative and
the optionee may purchase those Shares in any subsequent year during the term of
the option.
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(e) Limited Transferability. During the lifetime of the optionee,
options under the Plan shall be exercisable only by the optionee and shall not
be assignable or transferable other than by will or by the laws of descent and
distribution following the optionee's death. However, with the consent of the
Committee, Nonstatutory Stock Options may, in connection with the optionee's
estate plan, be assigned in whole or in part during the optionee's lifetime to
one or more members of the optionee's immediate family or to a trust established
exclusively for one or more such family members. The assigned portion may only
be exercised by the person or persons who acquire a proprietary interest in the
option pursuant to the assignment. The terms applicable to the assigned portion
shall be the same as those in effect for the option immediately prior to such
assignment and shall be set forth in such documents issued to the assignee by
the Committee. Nonstatutory Stock Options may also be assigned or transferred
pursuant to a qualified domestic relations order.
(f) Termination of Employment or Service.
(i) In the event the employment or service of the optionee
by the Company or a parent or subsidiary corporation of the Company terminates
for any reason other than because of death or physical disability, the option
may be exercised at any time prior to the expiration date of the option or the
expiration of three months after the date of such termination, whichever is the
shorter period, but only if and to the extent the optionee was entitled to
exercise the option at the date of such termination.
(ii) In the event of the termination of the optionee's
employment or service with the Company or a parent or subsidiary corporation of
the Company because the optionee becomes disabled (within the meaning of Section
22(e)(3) of the Code), the option may be exercised at any time prior to the
expiration date of the option or the expiration of one year after the date of
such termination, whichever is the shorter period, but only if and to the extent
the optionee was entitled to exercise the option at the date of such
termination.
(iii) In the event of the death of an optionee while employed
by or providing service to the Company or a parent or subsidiary corporation of
the Company, the option may be exercised at any time prior to the expiration
date of the option or the expiration of one year after the date of such death,
whichever is the shorter period, but only if and to the extent the optionee was
entitled to exercise the option on the date of death, and only by the person or
persons to whom such optionee's rights under the option shall pass by the
optionee's will or by the laws of descent and distribution of the state or
country of domicile at the time of death.
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(iv) The Committee, at the time of grant or at any time
thereafter, may extend the three-month and one-year expiration periods any
length of time not later than the original expiration date of the option, and
may increase the portion of an option that is exercisable, subject to such terms
and conditions as the Committee may determine.
(v) To the extent that the option of any deceased optionee
or of any optionee whose employment or service terminates is not exercised
within the applicable period, all further rights to purchase Shares pursuant to
such option shall cease and terminate.
(g) Purchase of Shares. Unless the Committee determines otherwise,
Shares may be acquired pursuant to an option only upon receipt by the Company of
notice in writing from the optionee of the optionee's intention to exercise,
specifying the number of Shares as to which the optionee desires to exercise the
option and the date on which the optionee desires to complete the transaction,
and, if required to comply with the Securities Act of 1933, as amended, or state
securities laws, the notice shall include a representation that it is the
optionee's present intention to acquire the Shares for investment and not with a
view to distribution. The certificates representing the Shares shall bear any
legends required by the Committee. Unless the Committee determines otherwise, on
or before the date specified for completion of the purchase of Shares pursuant
to an option, the optionee must have paid the Company the full purchase price of
such Shares in cash (including, with the consent of the Committee, cash that may
be the proceeds of a loan from the Company), or, with the consent of the
Committee, in whole or in part, in Shares valued at fair market value, as
determined pursuant to paragraph 6(b)(iv). Unless the Committee determines
otherwise, all payments made to the Company in connection with the exercise of
an option must be made by a certified or cashier's bank check or by the transfer
of immediately available federal funds. No Shares shall be issued until full
payment therefor has been made. With the consent of the Committee, an optionee
may request the Company to apply automatically the Shares to be received upon
the exercise of a portion of a stock option (even though stock certificates have
not yet been issued) to satisfy the purchase price for additional portions of
the option. Each optionee who has exercised an option shall immediately upon
notification of the amount due, if any, pay to the Company in cash amounts
necessary to satisfy any applicable federal, state and local tax withholding
requirements. If additional withholding is or becomes required beyond any amount
deposited before delivery of the certificates, the optionee shall pay such
amount to the Company on demand. If the optionee fails to pay the amount
demanded, the Company or any parent or subsidiary corporation of the Company may
withhold that amount from other amounts payable to the optionee by the Company
or the parent or subsidiary corporation, including salary, subject to applicable
law. With the consent of the Committee, an optionee may deliver Shares to the
Company to satisfy the withholding obligation.
7. STOCK BONUSES. The Committee may award Shares to Eligible Persons
under the Plan as stock bonuses. Shares awarded as a stock bonus shall be
subject to such terms, conditions, and restrictions as shall be determined by
the Committee, all of which shall be evidenced in a writing signed by the
recipient prior to receiving the bonus Shares. The Committee may not require
the recipient to pay any monetary consideration other than amounts
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necessary to satisfy tax withholding requirements. The certificates
representing the Shares awarded shall bear any legends required by the
Committee. The Company may require any recipient of a stock bonus to pay to the
Company in cash upon demand amounts necessary to satisfy any applicable federal,
state or local tax withholding requirements. If the recipient fails to pay the
amount demanded, the Company or any parent or subsidiary corporation of the
Company may withhold that amount from other amounts payable to the recipient by
the Company or the parent or subsidiary corporation, including salary, subject
to applicable law. With the consent of the Committee, a recipient may deliver
Shares to the Company to satisfy the withholding obligation.
8. STOCK SALES. The Committee may issue Shares to Eligible Persons
under the Plan for such consideration (including promissory notes and services)
as determined by the Committee, provided that in no event shall the
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consideration be less than 75 percent of the fair market value of the Shares at
the time of issuance, determined pursuant to paragraph 6(b)(iv). Shares issued
under this paragraph 8 shall be subject to the terms, conditions and
restrictions determined by the Committee. The restrictions may include
restrictions concerning transferability, repurchase by the Company and
forfeiture of the Shares issued, together with such other restrictions as may be
determined by the Committee. The certificates representing the Shares shall
bear any legends required by the Committee. The Company may require any
purchaser of stock issued under this paragraph 8 to pay to the Company in cash
upon demand amounts necessary to satisfy any applicable federal, state or local
tax withholding requirements. If the purchaser fails to pay the amount
demanded, the Company or any parent or subsidiary corporation of the Company may
withhold that amount from other amounts payable to the purchaser by the Company
or any parent or subsidiary corporation, including salary, subject to applicable
law. With the consent of the Committee, a purchaser may deliver Shares to the
Company to satisfy the withholding obligation.
9. STOCK APPRECIATION RIGHTS.
(a) Grant. Stock appreciation rights may be granted under the Plan
by the Committee, subject to such rules, terms, and conditions as the Committee
prescribes. The Committee shall pre-approve, at the time any such right is
granted to an officer or director subject to Section 16 of the Exchange Act, the
subsequent exercise of that right in accordance with the terms of the grant and
the provisions of this paragraph 9. Accordingly, no additional approval of the
Committee or the Board shall be required at the time the right is actually
exercised.
(b) Exercise.
(i) A stock appreciation right shall be exercisable only at
the time or times established by the Committee. If a stock appreciation right is
granted in connection with an option, the stock appreciation right shall be
exercisable only to the extent and on the same conditions that the related
option could be exercised. Upon exercise of a stock appreciation right, any
option or portion thereof to which the stock appreciation right relates
terminates. If
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a stock appreciation right is granted in connection with an option, upon
exercise of the option, the stock appreciation right or portion thereof to which
the option relates terminates.
(ii) The Committee may withdraw any stock appreciation right
granted under the Plan at any time and may impose any conditions upon the
exercise of a stock appreciation right (including conditions designed to ensure
compliance with the requirements for an exemption pursuant to Rule 16b-3 under
the Exchange Act) or adopt rules and regulations from time to time affecting the
rights of holders of stock appreciation rights. Such rules and regulations may
govern the right to exercise stock appreciation rights granted before adoption
or amendment of such rules and regulations as well as stock appreciation rights
granted thereafter.
(iii) Each stock appreciation right shall entitle the holder,
upon exercise, to receive from the Company in exchange therefor an amount equal
in value to the excess of the fair market value on the date of exercise of one
Share over its fair market value on the date of grant (or, in the case of a
stock appreciation right granted in connection with an option, the option price
per Share under the option to which the stock appreciation right relates),
multiplied by the number of Shares covered by the stock appreciation right or
the option, or portion thereof, that is surrendered. No stock appreciation right
shall be exercisable at a time that the amount determined under this
subparagraph is negative. Payment by the Company upon exercise of a stock
appreciation right may be made in Shares valued at fair market value, in cash,
or partly in Shares and partly in cash, all as determined by the Committee.
(iv) For purposes of this paragraph 9, the fair market value
of the Shares shall be determined pursuant to paragraph 6(b)(iv), on the trading
day preceding the date the stock appreciation right is exercised.
(v) No fractional Shares shall be issued upon exercise of a
stock appreciation right. In lieu thereof, cash may be paid in an amount equal
to the value of the fraction or, if the Committee shall determine, the number of
Shares may be rounded downward to the next whole Share.
(vi) Each participant who has exercised a stock appreciation
right shall, upon notification of the amount due, pay to the Company in cash
amounts necessary to satisfy any applicable federal, state or local tax
withholding requirements. If the participant fails to pay the amount demanded,
the Company or any parent or subsidiary corporation of the Company may withhold
that amount from other amounts payable to the participant by the Company or any
parent or subsidiary corporation, including salary, subject to applicable law.
With the consent of the Committee, a participant may satisfy this obligation, in
whole or in part, by having the Company withhold from any Shares to be issued
upon the exercise that number of Shares that would satisfy the withholding
amount due or by delivering Shares to the Company to satisfy the withholding
amount.
(vii) Upon the exercise of a stock appreciation right for
Shares, the number of Shares reserved for issuance under the Plan shall be
reduced by the number of
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Shares issued. Cash payments of stock appreciation rights shall not reduce the
number of Shares reserved for issuance under the Plan.
10. OPTION GRANTS TO NON-EMPLOYEE DIRECTORS.
(a) Automatic Grants. Each Non-Employee Director shall
automatically be granted a fully vested Nonstatutory Stock Option to purchase
2,858 Shares upon his or her election to the Board of Directors for the first
time. In addition, on each anniversary of each Non-Employee Director's
immediately preceding election or appointment to the Board, such Non-Employee
Director who is a member of the Board on such anniversary date shall
automatically be granted, effective as of such anniversary date, a fully vested
Nonstatutory Stock Option to purchase 1,905 shares. A "Non-Employee Director" is
a director of the Company who is not an employee of the Company or of any parent
or subsidiary corporation of the Company on the date the option is granted.
(b) Terms of Options. The exercise price for options granted under
this paragraph 10 shall be the fair market value of the Shares on the date of
grant, determined pursuant to paragraph 6(b)(iv). Each such option shall have a
10 year term from the date of grant, unless earlier terminated as provided in
paragraph 6(f).
11. CHANGES IN CAPITAL STRUCTURE. If the outstanding shares of
Common Stock of the Company are hereafter increased or decreased or changed into
or exchanged for a different number or kind of shares or other securities of the
Company or of another corporation by reason of any recapitalization,
reclassification, stock split, combination of shares or dividend payable in
shares, the Committee shall make appropriate adjustments to (i) the number and
kind of securities available for awards under the Plan; (ii) the number and kind
of securities as to which outstanding options and stock appreciation rights, or
portions thereof then unexercised, shall be exercisable, so that the
participant's proportionate interest before and after the occurrence of the
event is maintained, provided that this paragraph 11 shall not apply with
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respect to transactions referred to in paragraph 13; (iii) the maximum number
and kind of securities for which any one person may be granted stock options,
separately exercisable stock appreciation rights and direct stock awards per
calendar year; and (iv) the number and kind of securities for which automatic
option grants are to be made to newly-elected or continuing Non-Employee
Directors pursuant to paragraph 10 hereof. Appropriate adjustments to reflect
any such transaction shall also be made to the exercise price per share in
effect under each outstanding stock option or stock appreciation right, provided
the aggregate exercise price of each grant shall remain the same. The Committee
may also require that any securities issued in respect of or exchanged for
Shares issued hereunder that are subject to restrictions be subject to similar
restrictions. Notwithstanding the foregoing, the Committee shall have no
obligation to effect any adjustment that would or might result in the issuance
of fractional shares, and any fractional shares resulting from any adjustment
may be disregarded or provided for in any manner determined by the Committee.
Any such adjustment made by the Committee shall be conclusive.
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12. OTHER AWARDS. The Committee shall have the authority to specify
the terms and provisions of other equity-based or equity-related awards not
described herein which the Committee determines to be consistent with the
purpose of the Plan and the interests of the Company.
13. EFFECT OF REORGANIZATION OR LIQUIDATION.
(a) Cash, Stock or Other Property for Stock. Except as provided
in paragraph 13(b), upon a merger, consolidation, reorganization, plan of
exchange or liquidation involving the Company, as a result of which the
shareholders of the Company receive cash, stock or other property in exchange
for or in connection with their Common Stock (any such transaction to be
referred to in this paragraph 13 as an "Accelerating Event"), any option or
stock appreciation right granted hereunder shall terminate, but the optionee
shall have the right during a 30-day period immediately prior to any such
Accelerating Event to exercise his or her option or stock appreciation right, in
whole or in part, without any limitation on exercisability.
(b) Stock for Stock. If the shareholders of the Company receive
capital stock of another corporation ("Exchange Stock") in exchange for their
Common Stock in any transaction involving a merger, consolidation,
reorganization, or plan of exchange, all options granted hereunder shall be
converted into options to purchase shares of Exchange Stock and all stock
appreciation rights granted hereunder shall be converted into stock appreciation
rights measured by the Exchange Stock, unless the Committee, in its sole
discretion, determines that any or all such options or stock appreciation rights
granted hereunder shall not be converted, but instead shall terminate in
accordance with the provisions of paragraph 13(a). The amount and price of
converted options and stock appreciation rights shall be determined by adjusting
the amount and price of the options or stock appreciation rights granted
hereunder to take into account the relative values of the Exchange Stock and the
Common Stock in the transaction.
(c) Change in Control. In the event of a Change in Control and
except as the Committee (as constituted immediately prior to such Change in
Control) may otherwise determine in its sole discretion, (i) all options and
stock appreciation rights granted hereunder (including options and stock
appreciation rights granted to officers or directors less than six months prior
to any such Change in Control) shall become fully exercisable as of the date of
the Change in Control, whether or not then exercisable, and (ii) all
restrictions and conditions of all bonus Shares then outstanding shall lapse as
of the date of the Change in Control. A "Change in Control" means:
(i) The acquisition, directly or indirectly, by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3
under the Exchange Act) of securities representing 50.1 percent or more of
either (a) the then outstanding shares of Common Stock (the "Outstanding Company
Common Stock") or (b) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); provided, however, that
the following -------- -------
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acquisitions shall not constitute a Change of Control: (A) any acquisition
directly from the Company (excluding an acquisition by virtue of the exercise of
a conversion privilege, (B) any acquisition by the Company, (C) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (D) any acquisition by
any corporation pursuant to a reorganization, merger or consolidation which
would not be a Change of Control under paragraph (iii) below; or
(ii) Individuals who, as of the effective date of the Plan,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board; provided, however, that any individual
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becoming a director subsequent to the effective date of the Plan whose election,
or nomination for election by the Company's shareholders, was approved by a vote
of at least a majority of the directors then comprising the Incumbent Board will
be considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or consents
by or on behalf of a person other than the Board; or
(iii) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless following such
reorganization, merger or consolidation, (a) more than 50 percent of the then
outstanding shares of common stock of the corporation resulting from such
reorganization, merger or consolidation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such reorganization,
merger or consolidation in substantially the same proportions as their
ownership, immediately prior to such reorganization, merger or consolidation, of
the Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, and (b) at least a majority of the members of the board of
directors of the corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of the execution
of the initial agreement providing for such reorganization, merger or
consolidation; or
(iv) Approval by the shareholders of the Company of (a) a
complete liquidation or dissolution of the Company or (b) the sale or other
disposition of all or substantially all of the assets of the Company, other than
to a corporation, with respect to which following such sale or other
disposition, (A) more than 50 percent of the then outstanding shares of common
stock of such corporation and the combined voting power of the then outstanding
voting securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Outstanding
Company Voting Securities immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately prior to such
sale or other
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disposition, of the Outstanding Company Common Stock and Outstanding Company
Voting Securities, as the case may be, and (B) at least a majority of the
members of the board of directors of such corporation were members of the
Incumbent Board at the time of the execution of the initial agreement or action
of the Board providing for such sale or other disposition of assets of the
Company.
(d) The rights set forth in this paragraph 13 shall be
transferable only to the extent the related option or stock appreciation right
is transferable.
14. CORPORATE MERGERS, ACQUISITIONS, ETC. The Committee may also
grant options, grant stock appreciation rights, award stock bonuses and sell
stock under the Plan having terms, conditions and provisions that vary from
those specified in the Plan; provided that any such awards are granted in
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substitution for, or in connection with the assumption of, existing options,
stock appreciation rights, stock bonuses and stock sold or awarded by another
corporation and assumed or otherwise agreed to be provided for by the Company
pursuant to or by reason of a transaction involving a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization or
liquidation to which the Company or a parent or subsidiary corporation of the
Company is a party.
15. AMENDMENT OF PLAN.
(a) The Board may at any time, and from time to time, modify or
amend the Plan in such respects as it shall deem advisable because of changes in
the law while the Plan is in effect or for any other reason; except that no such
modification or amendment shall be effective without shareholders approval if
such approval is required to comply with any applicable law, rule or regulation.
Except as provided in paragraphs 6(b)(v), 10, 11 and 13, however, no change in
an award already granted shall be made without the written consent of the holder
of such award.
(b) The Plan was amended and restated by the Board on May 7, 1997
(the "1997 Restatement") to effect the following changes: (i) increase the
maximum number of shares of Common Stock authorized for issuance over the term
of the Plan by an additional 1,000,000 shares, (ii) render the Non-Employee
Directors who are serving as members of the Committee eligible to receive option
grants, stock appreciation rights and direct stock awards under the Plan during
their period of service on the Committee, and (iii) effect a series of
additional changes to the provisions of the Plan (including the stockholder
approval requirements, the transferability of Nonstatutory Stock Options and the
elimination of the six (6)-month holding period requirement as a condition to
the exercise of stock options and stock appreciation rights held by officers and
directors subject to Section 16 of the Exchange Act) in order to take advantage
of the recent amendments to Rule 16b-3 under the Act which exempts certain
officer and director transactions under the Plan from the short-swing liability
provisions of the Federal securities laws. The 1997 Restatement was approved by
the shareholders at the 1997 Annual Meeting.
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(c) The Plan was again amended and restated by the Board on May
11, 1998 (the "1998 Restatement") to increase the maximum number of shares of
Common Stock authorized for issuance thereunder by an additional 1,500,000
shares to a total of 3,836,715 shares of Common Stock. The shareholders
subsequently approved the 1998 Restatement at the Company's annual meeting of
shareholders held on June 18, 1998.
16. APPROVALS. The obligations of the Company under the Plan are
subject to the approval of state and federal authorities or agencies with
jurisdiction in the matter. The Company shall not be obligated to issue or
deliver Shares under the Plan if such issuance or delivery would violate
applicable state or federal securities laws, or if compliance with such laws
would, in the opinion of the Company, be unduly burdensome or require the
disclosure of information which would not be in the Company's best interests.
17. EMPLOYMENT AND SERVICE RIGHTS. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of the Company or any parent or subsidiary
corporation of the Company or shall interfere in any way with the right of the
Company or any parent or subsidiary corporation of the Company by whom such
employee is employed to terminate such employee's employment at any time, for
any reason, with or without cause, or to increase or decrease such employee's
compensation or benefits; or (ii) confer upon any person engaged by the Company
or any parent or subsidiary corporation of the Company any right to be retained
or employed by the Company or the parent or subsidiary or to the continuation,
extension, renewal, or modification of any compensation, contract, or
arrangement with or by the Company or the parent or subsidiary.
18. RIGHTS AS A SHAREHOLDER. The recipient of any award under the
Plan shall have no right as a shareholder with respect to any Shares until the
date of issue to the recipient of a stock certificate for such Shares. Except
as otherwise expressly provided in the Plan, no adjustment shall be made for
dividends or other rights for which the record date is prior to the date such
stock certificate is issued.
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