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Exhibit 99.1
HOLLIS-EDEN PHARMACEUTICALS, INC.
1997 INCENTIVE STOCK OPTION PLAN
As Amended on March 13, 2000
INTRODUCTION
Hollis-Eden Pharmaceuticals, Inc., a Delaware corporation (hereinafter
referred to as the "Corporation"), hereby establishes an incentive compensation
plan to be known as the "Hollis-Eden Pharmaceuticals, Inc. 1997 Incentive Stock
Option Plan" (hereinafter referred to as the "Plan"), as set forth in this
document. The Plan permits the grant of Non-Qualified Stock Options and
Incentive Stock Options. The Plan became effective on February 5, 1997.
The purpose of the Plan is to promote the success and enhance the value of
the Corporation by linking the personal interests of Participants to those of
the Corporation's stockholders by providing Participants with an incentive for
outstanding performance. The Plan is further intended to assist the Corporation
in its ability to motivate, and retain the services of, Participants upon whose
judgment, interest and special effort the successful conduct of its operations
is largely dependent.
DEFINITIONS
For purposes of this Plan, the following terms shall be defined as follows
unless the context clearly indicates otherwise:
(a) "Award Agreement" shall mean the written agreement, executed by an
appropriate officer of the Corporation, pursuant to which a Plan Award is
granted.
(b) "Board of Directors" shall mean the Board of Directors of the
Corporation.
(c) "Code" shall mean the Internal Revenue Code of 1986, as amended,
and the rules and regulations thereunder.
(d) "Committee" shall mean the Committee hereinafter described in
Section I.
(e) "Common Stock" shall mean the common stock, par value $.01 per
share, of the Corporation.
(f) "Consultant" shall mean an individual who is in a Consulting
Relationship with the Corporation or any Parent or Subsidiary.
(g) "Consulting Relationship" shall mean the relationship that exists
between an individual and the Corporation (or any Parent or Subsidiary) if
(i) such individual or (ii) any entity of which such individual is an
executive officer or owns a substantial equity interest has entered into a
written consulting contract with the Corporation or any Parent or
Subsidiary.
(h) "Corporation" shall mean Hollis-Eden Pharmaceuticals, Inc., a
Delaware corporation.
(i) "Disability" shall have the same meaning as the term "permanent
and total disability" under Section 22(e)(3) of the Code.
(j) "Employee" shall mean a common-law employee of the Company or of
any Parent or Subsidiary.
(k) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder.
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(l) "Executive" means an employee of the Corporation or of any Parent
or Subsidiary whose compensation is subject to the deduction limitations
set forth under Code Section 162(m).
(m) "Fair Market Value" of the Corporation's Common Stock on a Trading
Day shall mean the last reported sale price for Common Stock or, in case no
such reported sale takes place on such
Trading Day, the average of the closing bid and asked prices for the Common
Stock for such Trading Day, in either case on the principal national
securities exchange on which the Common Stock is listed or admitted to
trading, or if the Common Stock is not listed or admitted to trading on any
national securities exchange, but is traded in the over-the-counter market,
the closing sale price of the Common Stock or, if no sale is publicly
reported, the average of the closing bid and asked quotations for the
Common Stock, as reported by the National Association of Securities Dealers
Automated Quotation System ("NASDAQ") or any comparable system or, if the
Common Stock is not listed on NASDAQ or a comparable system, the closing
sale price of the Common Stock or, if no sale is publicly reported, the
average of the closing bid and asked prices, as furnished by two members of
the National Association of Securities Dealers, Inc. who make a market in
the Common Stock selected from time to time by the Corporation for that
purpose. In addition, for purposes of this definition, a "Trading Day"
shall mean, if the Common Stock is listed on any national securities
exchange, a business day during which such exchange was open for trading
and at least one trade of Common Stock was effected on such exchange on
such business day, or, if the Common Stock is not listed on any national
securities exchange but is traded in the over-the-counter market, a
business day during which the over-the-counter market was open for trading
and at least one "eligible dealer" quoted both a bid and asked price for
the Common Stock. An "eligible dealer" for any day shall include any
broker-dealer who quoted both a bid and asked price for such day, but shall
not include any broker-dealer who quoted only a bid or only an asked price
for such day. In the event the Corporation's Common Stock is not publicly
traded, the Fair Market Value of such Common Stock shall be determined by
the Committee in good faith.
(n) "Incentive Stock Option" shall mean a stock option satisfying the
requirements for tax-favored treatment under Section 422 of the Code.
(o) "Non-Qualified Option" shall mean a stock option which does not
satisfy the requirements for, or which is not intended to be eligible for,
tax-favored treatment under Section 422 of the Code.
(p) "Option" shall mean an Incentive Stock Option or a Non-Qualified
Stock Option granted pursuant to the provisions of Section V hereof.
(q) "Optionee" shall mean a Participant who is granted an Option under
the terms of this Plan.
(r) "Outside Directors" shall mean members of the Board of Directors
of the Corporation who are classified as "outside directors" under Section
162(m) of the Code.
(s) "Parent" shall mean a parent corporation of the Corporation within
the meaning of Section 424(e) of the Code.
(t) "Participant" shall mean any Employee or other person
participating under the Plan.
(u) "Plan Award" shall mean an Option granted pursuant to the terms of
this Plan.
(v) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations thereunder.
(w) "Subsidiary" shall mean a subsidiary corporation of the
Corporation within the meaning of Section 424(f) of the Code.
(x) "Termination of Consulting Relationship" shall mean the cessation,
abridgement or termination of a Consultant's Consulting Relationship with
the Corporation or any Parent or Subsidiary as a result of (i) the
Consultant's death or Disability (ii) the cancellation, annulment,
expiration, termination or breach of the written
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consulting contract between the Corporation (or any Parent or Subsidiary)
and the Consultant (or any other entity) giving rise to the Consulting
Relationship or (iii) if the written consulting contract is not directly
between the Corporation (or any Parent or Subsidiary) and the Consultant,
the Consultant's termination of service with, or sale of all or
substantially all of his equity interest in, the entity which has entered
into the written consulting contract with the Corporation, Parent or
Subsidiary.
SECTION I
ADMINISTRATION
The Plan shall be administered by the Committee, which shall be composed
solely of at least two Non-Employee Directors, as defined in Rule 16b-3(b)(3)
promulgated under the Exchange Act, and who also qualify as "Outside Directors".
Subject to the provisions of the Plan, the Committee may establish from time to
time such regulations, provisions, proceedings and conditions of awards which,
in its sole opinion, may be advisable in the administration of the Plan. A
majority of the Committee shall constitute a quorum, and, subject to the
provisions of Section IV of the Plan, the acts of a majority of the members
present at any meeting at which a quorum is present, or acts approved in writing
by a majority of the Committee, shall be the acts of the Committee as a whole.
SECTION II
SHARES AVAILABLE
Subject to the adjustments provided in Section VI of the Plan, the
aggregate number of shares of the Common Stock which may be granted for all
purposes under the Plan shall be 2,750,000 shares. Shares of Common Stock
underlying awards of securities (derivative or not) and shares of Common Stock
awarded hereunder (whether or not on a restricted basis) shall be counted
against the limitation set forth in the immediately preceding sentence and may
be reused to the extent that the related Plan Award to any individual is settled
in cash, expires, is terminated unexercised, or is forfeited. Common Stock
granted to satisfy Plan Awards under the Plan may be authorized and unissued
shares of the Common Stock, issued shares of such Common Stock held in the
Corporation's treasury or shares of Common Stock acquired on the open market.
SECTION III
ELIGIBILITY
Officers and key employees of the Corporation, or of any Parent or
Subsidiary, who are regularly employed on a salaried basis as common law
employees, Consultants, and directors of the Corporation or of any Parent or
Subsidiary who are not Employees, shall be eligible to participate in the Plan.
Where appropriate under this Plan, directors who are not Employees shall be
referred to as "employees" and their service as directors as "employment".
SECTION IV
AUTHORITY OF COMMITTEE
The Plan shall be administered by, or under the direction of, the
Committee, which shall administer the Plan so as to comply at all times with
Section 16 of the Exchange Act and the rules and regulations promulgated
thereunder, to the extent such compliance is required, and shall otherwise have
plenary authority to interpret the Plan and to make all determinations specified
in or permitted by the Plan or deemed necessary or desirable for its
administration or for the conduct of the Committee's business. Subject to the
provisions of Section X hereof, all interpretations and determinations of the
Committee may be made on an individual or group basis and shall be final,
conclusive and binding on all interested parties. Subject to the express
provisions of the Plan, the Committee shall have authority, in its discretion,
to determine the persons to whom Plan Awards shall be granted, the times when
such Plan Awards shall be granted, the number of Plan Awards, the exercise price
of each Plan Award, the period(s) during which a Plan Award shall be exercisable
(whether in whole or in part), the restrictions to be applicable to Plan Awards
and the other terms and provisions thereof (which need not be identical). In
addition, the authority of the Committee shall include, without limitation, the
following:
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(a) Financing. The arrangement of temporary financing for an Optionee
by registered broker-dealers, under the rules and regulations of the
Federal Reserve Board, for the purpose of assisting an Optionee in the
exercise of an Option, such authority to include the payment by the
Corporation of the commissions of the broker-dealer.
(b) Procedures for Exercise of Option. The establishment of procedures
for an Optionee to exercise an Option by (i) payment of cash (including
check), (ii) payment pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which, prior to the issuance of
Common Stock, results in either the receipt of cash (or check) by the
Corporation or the receipt of irrevocable instructions to pay the aggregate
exercise price to the Corporation from the sales proceeds, (iii) provided
that at the time of exercise the Common Stock is publicly traded and quoted
regularly in the Wall Street Journal, payment by delivery of already-owned
shares of Common Stock, held for the period required to avoid a charge to
the Corporation's reported earnings, and owned free and clear of any liens,
claims, encumbrances or security interests, which Common Stock shall be
valued at its Fair Market Value on the date of exercise or (iv) payment by
a combination of the methods of payment permitted by clauses (b)(i) through
(b)(iii) above.
(c) Withholding. The establishment of a procedure whereby a number of
shares of Common Stock or other securities may be withheld from the total
number of shares of Common Stock or other securities to be issued upon
exercise of an Option or for the tender of shares of Common Stock owned by
any Participant to meet any obligation of withholding for taxes incurred by
the Participant upon such exercise.
SECTION V
STOCK OPTIONS
The Committee shall have the authority, in its discretion, to grant
Incentive Stock Options or to grant Non-Qualified Stock Options or to grant both
types of Options. Notwithstanding anything contained herein to the contrary, an
Incentive Stock Option may be granted only to common law employees of the
Corporation or of any Parent or Subsidiary now existing or hereafter formed or
acquired, and not to any director or officer who is not also such a common law
employee. In order for an Option grant to satisfy the "performance-based
compensation" exemption to the deduction limitation under Code Section 162(m),
the maximum number of shares of Common Stock subject to Options which may be
granted to any single Executive during any one calendar year is 250,000. The
terms and conditions of the Options shall be determined from time to time by the
Committee; provided, however, that the Options granted under the Plan shall be
subject to the following:
(a) Exercise Price. The Committee shall establish the exercise price
at the time any Option is granted at such amount as the Committee shall
determine; provided, however, that the exercise price for each share of
Common Stock purchasable under any Incentive Stock Option granted hereunder
shall be such amount as the Committee shall, in its best judgment,
determine to be not less than one hundred percent (100%) of the Fair Market
Value per share of Common Stock at the date the Option is granted; and
provided, further, that in the case of an Incentive Stock Option granted to
a person who, at the time such Incentive Stock Option is granted, owns
shares of stock of the Corporation or of any Parent or Subsidiary which
possess more than ten percent (10%) of the total combined voting power of
all classes of shares of stock of the Corporation or of any Parent or
Subsidiary, the exercise price for each share of Common Stock shall be such
amount as the Committee, in its best judgment, shall determine to be not
less than one hundred ten percent (110%) of the Fair Market Value per share
of Common Stock at the date the Option is granted. The exercise price will
be subject to adjustment in accordance with the provisions of Section VI of
the Plan.
(b) Payment of Exercise Price. The price per share of Common Stock
with respect to each Option shall be payable at the time the Option is
exercised. Such price shall be payable in cash or pursuant to any of the
methods set forth in Sections IV(a) or (b) hereof, as determined by the
Participant. Shares of Common Stock delivered to the Corporation in payment
of the exercise price shall be valued at the Fair Market Value of the
Common Stock on the date preceding the date of the exercise of the Option.
(c) Exercisability of Options. Except as provided in Section V(e)
hereof, each Option shall be exercisable in whole or in installments, and
at such time(s), and subject to the fulfillment of any conditions on, and
to any
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limitations on, exercisability as may be determined by the Committee at the
time of the grant of such Options. The right to purchase shares of Common
Stock shall be cumulative so that when the right to purchase any shares of
Common Stock has accrued such shares of Common Stock or any part thereof
may be purchased at any time thereafter until the expiration or termination
of the Option.
(d) Expiration of Options. No Incentive Stock Option by its terms
shall be exercisable after the expiration of ten (10) years from the date
of grant of the Option; provided, however, in the case of an Incentive
Stock Option granted to a person who, at the time such Option is granted,
owns shares of stock of the Corporation or of any Parent or Subsidiary
possessing more than ten percent (10%) of the total combined voting power
of all classes of shares of stock of the Corporation or of any Parent or
Subsidiary, such Option shall not be exercisable after the expiration of
five (5) years from the date such Option is granted.
(e) Exercise Upon Optionee's Termination of Employment or Termination
of Consulting Relationship. If the employment of an Optionee by the
Corporation or by any Parent or Subsidiary is terminated for any reason
other than death, any Incentive Stock Option granted to such Optionee may
not be exercised later than three (3) months (one (1) year in the case of
termination due to Disability) after the date of such termination of
employment. For purposes of determining whether any Optionee has incurred a
termination of employment (or a Termination of Consulting Relationship), an
Optionee who is both an employee (or a Consultant) and a director of the
Corporation and/or any Parent or Subsidiary shall (with respect to any Non-
Qualified Option that may have been granted to him) be considered to have
incurred a termination of employment (or a Termination of Consulting
Relationship) only upon his termination of service both as an employee (or
as a Consultant) and as a director.
(f) Maximum Amount of Incentive Stock Options. Each Plan Award under
which Incentive Stock Options are granted shall provide that to the extent
the aggregate of the (i) Fair Market Value of the shares of Common Stock
(determined as of the time of the grant of the Option) subject to such
Incentive Stock Option and (ii) the fair market values (determined as of
the date(s) of grant of the option(s) of all other shares of Common Stock
subject to incentive stock options granted to an Optionee by the
Corporation or any Parent or Subsidiary, which are exercisable for the
first time by any person during any calendar year, exceed(s) one hundred
thousand dollars ($100,000), such excess shares of Common Stock shall not
be deemed to be purchased pursuant to Incentive Stock Options. The terms of
the immediately preceding sentence shall be applied by taking all options,
whether or not granted under this Plan, into account in the order in which
they are granted.
SECTION VI
ADJUSTMENT OF SHARES; MERGER OR
CONSOLIDATION, ETC. OF THE CORPORATION
(a) Recapitalization, Etc. In the event there is any change in the
Common Stock of the Corporation by reason of any reorganization,
recapitalization, stock split, stock dividend or otherwise, there shall be
substituted for or added to each share of Common Stock theretofore
appropriated or thereafter subject, or which may become subject, to any
Option, the number and kind of shares of stock or other securities into
which each outstanding share of Common Stock shall be so changed or for
which each such share shall be exchanged, or to which each such share be
entitled, as the case may be, and the per share price thereof also shall be
appropriately adjusted. Notwithstanding the foregoing, (i) each such
adjustment with respect to an Incentive Stock Option shall comply with the
rules of Section 424(a) of the Code and (ii) in no event shall any
adjustment be made which would render any Incentive Stock Option granted
hereunder to be other than an incentive stock option for purposes of
Section 422 of the Code.
(b) Merger, Consolidation or Change in Control of Corporation. Upon
(i) the merger or consolidation of the Corporation with or into another
corporation (pursuant to which the stockholders of the Corporation
immediately prior to such merger or consolidation will not, as of the date
of such merger or consolidation, own a beneficial interest in shares of
voting securities of the corporation surviving such merger or consolidation
having at least a majority of the combined voting power of such
corporation's then outstanding securities), if the agreement of merger or
consolidation does not provide for (1) the continuance of the Options
granted hereunder or (2) the substitution of new options for Options
granted hereunder, or for the assumption of such Options by the surviving
corporation, (ii) the dissolution, liquidation, or sale of all or
substantially all the assets of the Corporation to a
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person unrelated to the Corporation or to a direct or indirect owner of a
majority of the voting power of the Corporation's then outstanding voting
securities (such sale of assets being referred to as an "Asset Sale") or
(iii) a Change in Control of the Corporation, the vesting of Options
theretofore granted and still outstanding (and not otherwise expired) shall
be accelerated in full. The Corporation, to the extent practicable, shall
give advance notice to affected Optionees of such merger, consolidation,
dissolution, liquidation, Asset Sale or Change in Control of the
Corporation. All such Options which are not exercised prior to the
effective date of such merger, consolidation, dissolution, liquidation or
Asset Sale shall be forfeited as of the effective time of such merger,
consolidation, dissolution, liquidation or Asset Sale (but not in the case
of a Change in Control of the Corporation).
(c) Definition of Change in Control of the Corporation. As used
herein, a "Change in Control of the Corporation" shall be deemed to have
occurred if any person (including any individual, firm, partnership or
other entity) together with all Affiliates and Associates (as defined under
Rule 12b-2 of the General Rules and Regulations promulgated under the
Exchange Act) of such person (but excluding (i) a trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation or any subsidiary of the Corporation, (ii) a corporation owned,
directly or indirectly, by the stockholders of the Corporation in
substantially the same proportions as their ownership of the Corporation,
(iii) the Corporation or any subsidiary of the Corporation or (iv) only as
provided in the immediately following sentence, a Participant together with
all Affiliates and Associates of the Participant) is or becomes the
Beneficial Owner (as defined in Rule 13d-3 promulgated under the Exchange
Act), directly or indirectly, of securities of the Corporation representing
40% of more of the combined voting power of the Corporation's then
outstanding securities. The provisions of clause (iv) of the immediately
preceding sentence shall apply only with respect to the Option(s) held by
the Participant who, together with his Affiliates or Associates, if any, is
or becomes the direct or indirect Beneficial Owner of the percentage of
securities set forth in such clause.
SECTION VII
MISCELLANEOUS PROVISIONS
(a) Administrative Procedures. The Committee may establish any
procedures determined by it to be appropriate in discharging its
responsibilities under the Plan. Subject to the provisions of Section X
hereof, all actions and decisions of the Committee shall be final.
(b) Assignment or Transfer. No grant or award of any Plan Award (other
than a Non-Qualified Option) or any rights or interests therein shall be
assignable or transferable by a Participant except by will or the laws of
descent and distribution. During the lifetime of a Participant, Incentive
Stock Options granted hereunder shall be exercisable only by the
Participant.
(c) Investment Representation. With respect to shares of Common Stock
received pursuant to the exercise of an Option, the Committee may require,
as a condition of receiving such securities, that the Participant furnish
to the Corporation such written representations and information as the
Committee deems appropriate to permit the Corporation, in light of the
existence or nonexistence of an effective registration statement under the
Securities Act to deliver such securities in compliance with the provisions
of the Securities Act.
(d) Withholding Taxes. In the case of the issuance or distribution of
Common Stock or other securities hereunder upon the exercise of any Plan
Award, the Corporation, as a condition of such issuance or distribution,
may require the payment (through withholding from the Participant's salary,
reduction of the number of shares of Common Stock or other securities to be
issued, or otherwise) of any such taxes. Each Participant may satisfy the
withholding obligations by paying to the Corporation a cash amount equal to
the amount required to be withheld or by tendering to the Corporation a
number of shares of Common Stock having a value equivalent to such cash
amount, or by use of any available procedure as described under Section
IV(c) hereof.
(e) Costs and Expenses. The costs and expenses of administering the
Plan shall be borne by the Corporation and shall not be charged against any
award nor to any employee receiving a Plan Award.
(f) Other Incentive Plans. The adoption of the Plan does not preclude
the adoption by appropriate means of any other incentive plan for
employees.
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(g) Plurals and Gender. Where appearing in the Plan, masculine gender
shall include the feminine and neuter genders, and the singular shall
include the plural, and vice versa, unless the context clearly indicates a
different meaning.
(h) Headings. The headings and sub-headings in this Plan are inserted
for the convenience of reference only and are to be ignored in any
construction of the provisions hereof.
(i) Severability. In case any provision of this Plan shall be held
illegal or void, such illegality or invalidity shall not affect the
remaining provisions of this Plan, but shall be fully severable, and the
Plan shall be construed and enforced as if said illegal or invalid
provisions had never been inserted herein.
(j) Payments Due Missing Persons. The Corporation shall make a
reasonable effort to locate all persons entitled to benefits under the
Plan; however, notwithstanding any provisions of this Plan to the contrary,
if, after a period of one (1) year from the date such benefits shall be
due, any such persons entitled to benefits have not been located, their
rights under the Plan shall stand suspended. Before this provision becomes
operative, the Corporation shall send a certified letter to all such
persons at their last known addresses advising them that their rights under
the Plan shall be suspended. Subject to all applicable state laws, any such
suspended amounts shall be held by the Corporation for a period of one (1)
additional year and thereafter such amounts shall be forfeited and
thereafter remain the property of the Corporation.
(k) Liability and Indemnification. (i) Neither the Corporation nor any
Parent or Subsidiary shall be responsible in any way for any action or
omission of the Committee, or any other fiduciaries in the performance of
their duties and obligations as set forth in this Plan. Furthermore,
neither the Corporation nor any Parent or Subsidiary shall be responsible
for any act or omission of any of their agents, or with respect to reliance
upon advice of their counsel provided that the Corporation and/or the
appropriate Parent or Subsidiary relied in good faith upon the action of
such agent or the advice of such counsel.
(ii) Except for their own gross negligence or willful misconduct
regarding the performance of the duties specifically assigned to them
under, or their willful breach of the terms of, this Plan, the Corporation,
each Parent and Subsidiary and the Committee shall be held harmless by the
Participants, former Participants, beneficiaries and their representatives
against liability or losses occurring by reason of any act or omission.
Neither the Corporation, any Parent or Subsidiary, the Committee, nor any
agents, employees, officers, directors or shareholders of any of them, nor
any other person shall have any liability or responsibility with respect to
this Plan, except as expressly provided herein.
(l) Incapacity. If the Committee shall receive evidence satisfactory
to it that a person entitled to receive payment of any Plan Award is, at
the time when such benefit becomes payable, a minor, or is physically or
mentally incompetent to receive such Plan Award and to give a valid release
thereof, and that another person or an institution is then maintaining or
has custody of such person and that no guardian, committee or other
representative of the estate of such person shall have been duly appointed,
the Committee may make payment of such Plan Award otherwise payable to such
person to such other person or institution, including a custodian under a
Uniform Gifts to Minors Act, or corresponding legislation (who shall be an
adult, a guardian of the minor or a trust company), and the release by such
other person or institution shall be a valid and complete discharge for the
payment of such Plan Award.
(m) Cooperation of Parties. All parties to this Plan and any person
claiming any interest hereunder agree to perform any and all acts and
execute any and all documents and papers which are necessary or desirable
for carrying out this Plan or any of its provisions.
(n) Governing Law. All questions pertaining to the validity,
construction and administration of the Plan shall be determined in
accordance with the laws of the State of California.
(o) Nonguarantee of Employment or Consulting Relationship. Nothing
contained in this Plan shall be construed as a contract of employment (or
as a consulting contract) between the Corporation (or any Parent or
Subsidiary), and any employee or Participant, as a right of any employee or
Participant to be continued in the
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employment of or in a Consulting Relationship with) the Corporation (or any
Parent or Subsidiary), or as a limitation on the right of the Corporation
or any Parent or Subsidiary to discharge any of its employees (or
Consultants), at any time, with or without cause.
(p) Notices. Each notice relating to this Plan shall be in writing and
delivered in person or by certified mail to the proper address. All notices
to the Corporation or the Committee shall be addressed to it at the
Corporation's then principal executive offices, Attn: Corporate Secretary.
All notices to Participants, former Participants, beneficiaries or other
persons acting for or on behalf of such persons shall be addressed to such
person at the last address for such person maintained in the Committee's
records.
(q) Written Agreements. Each Plan Award shall be evidenced by a signed
written agreement (the "Award Agreements") between the Corporation and the
Participant containing the terms and conditions of the award.
SECTION VIII
AMENDMENT OR TERMINATION OF PLAN
The Board of Directors of the Corporation shall have the right to amend,
suspend or terminate the Plan at any time, provided that no amendment shall be
made which shall increase the total number of shares of the Common Stock of the
Corporation which may be issued and sold pursuant to Incentive Stock Options,
reduce the minimum exercise price in the case of an Incentive Stock Option or
modify the provisions of the Plan relating to eligibility with respect to
Incentive Stock Options unless such amendment is made by or with the approval of
the stockholders within 12 months of the effective date of such amendment, but
only if such approval is required by any applicable provision of law. The Board
of Directors of the Corporation shall also be authorized to amend the Plan and
the Options granted thereunder to maintain qualification as "incentive stock
options" within the meaning of Section 422 of the Code, if applicable. Except as
otherwise provided herein, no amendment, suspension or termination of the Plan
shall alter or impair any Plan Awards previously granted under the Plan without
the consent of the holder thereof.
SECTION IX
TERM OF PLAN
The Plan shall automatically terminate on the day immediately preceding the
tenth anniversary of the date the Plan was adopted by the Board of Directors of
the Corporation, unless sooner terminated by such Board of Directors. No Plan
Awards may be granted under the Plan subsequent to the termination of the Plan.
SECTION X
CLAIMS PROCEDURES
(a) Denial. If any Participant, former Participant or beneficiary is
denied any vested benefit to which he is, or reasonably believes he is,
entitled under this Plan, either in total or in an amount less than the
full vested benefit to which he would normally be entitled, the Committee
shall advise such person in writing the specific reasons for the denial.
The Committee shall also furnish such person at the time with a written
notice containing (i) a specific reference to pertinent Plan provisions,
(ii) a description of any additional material or information necessary for
such person to perfect his claim, if possible, and an explanation of why
such material or information is needed and (iii) an explanation of the
Plan's claim review procedure.
(b) Written Request for Review. Within 60 days of receipt of the
information stated in subsection (a) above, such person shall, if he
desires further review, file a written request for reconsideration with the
Committee.
(c) Review of Document. So long as such person's request for review is
pending (including the 60 day period in subsection (b) above), such person
or his duly authorized representative may review pertinent Plan documents
and may submit issues and comments in writing to the Committee.
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(d) Committee's Final and Binding Decision. A final and binding
decision shall be made by the Committee within 60 days of the filing by
such person of this request for reconsideration; provided, however, that if
the Committee, in its discretion, feels that a hearing with such person or
his representative is necessary or desirable, this period shall be extended
for an additional 60 days.
(e) Transmittal of Decision. The Committee's decision shall be
conveyed to such person in writing and shall (i) include specific reasons
for the decision, (ii) be written in a manner calculated to be understood
by such person and (iii) set forth the specific references to the pertinent
Plan provisions on which the decision is based.
(f) Limitation on Claims. Notwithstanding any provisions of this Plan
to the contrary, no Participant (nor the estate or other beneficiary of a
Participant) shall be entitled to assert a claim against the Corporation
(or against any Parent or Subsidiary) more than three years after the date
the Participant (or his estate or other beneficiary) initially is entitled
to receive benefits hereunder.
9
