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Exhibit 4.1
PHOTOELECTRON CORPORATION
1996 EQUITY INCENTIVE PLAN
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(as amended May 27, 1998 and May 17, 2000)
1. Purpose. This 1996 Equity Incentive Plan (the "Plan") is intended to
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provide incentives:
(a) to the officers and other employees of Photoelectron Corporation,
a Massachusetts corporation (the "Company"), and any present or future
subsidiaries of the Company (collectively, "Related Corporations"), by
providing them with opportunities to purchase stock in the Company pursuant
to options granted hereunder which qualify as "incentive stock options"
under Section 422(b) of the Internal Revenue Code of 1986 (the "Code")
("ISO" or "ISO's");
(b) to directors, officers, employees and consultants of the Company
and Related Corporations by providing them with opportunities to purchase
stock in the Company pursuant to options granted hereunder which do not
qualify as ISOs ("Non-Qualified Option" or "Non-Qualified Options");
(c) to directors, officers, employees and consultants of the Company
and Related Corporations by providing them with awards of stock in the
Company ("Awards"); and
(d) to directors, officers, employees and consultants of the Company
and Related Corporations by providing them with opportunities to make
direct purchases of stock in the Company ("Purchases").
Both ISOs and Non-Qualified Options are referred to hereafter individually as an
"Option" and collectively as "Options". Options, Awards and authorizations to
make Purchases are referred to hereafter collectively as "Stock Rights". As used
herein, the terms "parent" and "subsidiary" mean "parent corporation" and
"subsidiary corporation", respectively, as those terms are defined in Section
424 of the Code.
2. Administration of the Plan.
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A. Board or Committee Administration. The Plan shall be administered by
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the Board of Directors of the Company (the "Board"). The Board may delegate any
or all of its responsibilities under the Plan to a Committee of two (2) or more
of its members who, if the Company is then a Public Company (as defined below),
qualify as "Non-Employee Directors" within the meaning of Rule 16b-3 adopted
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act"), to
administer the Plan; provided such Committee is delegated such powers in
accordance with state law, and provided further that grants of Stock Rights to
Board members shall be made by the Board in
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accordance with state law. (All references in this Plan to the "Committee" shall
mean the Board (i) if no Committee has been so appointed, or (ii) even if a
Committee has been appointed, with respect to Stock Rights granted to Board
members). The Company shall be a "Public Company" at such time as it registers
any class of any equity security pursuant to Section 12 of the Exchange Act.
B. Authority of Committee. Subject to the terms of the Plan, the
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Committee shall have the authority to:
(i) determine the employees of the Company and Related Corporations
(from among the class of employees eligible under paragraph 3 to receive
ISOs) to whom ISOs may be granted, and to determine (from among the class
of individuals and entities eligible under paragraph 3 to receive Non-
Qualified Options and Awards and to make Purchases) to whom Non-Qualified
Options, Awards and authorizations to make Purchases may be granted;
(ii) determine the time or times at which Options and Awards may be
granted and Purchases made;
(iii) determine the option price of shares subject to each Option,
which price in the case of an ISO shall not be less than the minimum price
specified in paragraph 6, and the purchase price of shares subject to each
Purchase;
(iv) determine whether each Option granted shall be an ISO or a Non-
Qualified Option;
(v) determine (subject to paragraph 7) the time or times when each
Option shall become exercisable and the duration of the exercise period;
(vi) determine whether restrictions such as repurchase options are
to be imposed on shares subject to Options, Awards and Purchases and the
nature of such restrictions, if any;
(vii) pre-establish objective performance goals with respect to Stock
Rights (other than ISOs and Non-Qualified Options with an exercise price
not less than the fair market value per share of Common Stock on the date
of grant) to be provided to "covered employees" within the meaning of
Section 162(m) of the Code but only if necessary to preclude the
applicability of said Section 162(m);
(viii) impose such other terms and conditions with respect to Stock
Rights not inconsistent with the terms of this Plan as it deems necessary
or desirable; and
(ix) interpret the Plan and prescribe and rescind rules and
regulations relating to it.
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If the Committee determines to issue a Non-Qualified Option, it shall take
whatever actions it deems necessary, under the Code and the regulations
promulgated thereunder, to ensure that such Option is not treated as an ISO.
The interpretation and construction by the Committee of any provisions of
the Plan or of any Stock Right granted under it shall be final unless otherwise
determined by the Board. The Committee may from time to time adopt such rules
and regulations for carrying out the Plan as it may deem best. No member of the
Board or the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any Stock Right granted under it.
C. Committee Actions. The Committee may select one of its members as its
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chairman, and shall hold meetings at such time and places as it may determine.
Acts by a majority of the Committee, or acts reduced to or approved in writing
by a majority of the members of the Committee, shall be the valid acts of the
Committee. From time to time the Board may increase the size of the Committee
and appoint additional members thereof, remove members (with or without cause)
and appoint new members in substitution therefor, fill vacancies however caused,
or remove all members of the Committee and thereafter directly administer the
Plan.
3. Eligible Employees and Others. ISOs may be granted to any employee of
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the Company or any Related Corporation. Those officers and directors of the
Company who are not employees may not be granted ISOs under the Plan. Non-
Qualified Options, Awards and authorizations to make Purchases may be granted to
any employee, or officer or director (whether or not also an employee), or
consultant of the Company or any Related Corporation. The Committee may take
into consideration a recipient's individual circumstances in determining whether
to grant a Stock Right. Granting a Stock Right to any individual or entity shall
neither entitle that individual or entity to participate in, nor disqualify that
individual or entity from participation in, any other grant of Stock Rights.
4. Stock. The stock subject to Options and which may be issued as Awards
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and to persons making Purchases shall be authorized but unissued shares of
common stock of the Company, $.01 par value (the "Common Stock"), or shares of
Common Stock reacquired by the Company in any manner. The aggregate number of
shares which may be issued pursuant to the Plan is one million forty-one
thousand seven hundred seventy-five (1,041,775), subject to adjustment as
provided in paragraph 10. Any such shares may be issued upon the exercise of
ISOs or Non-Qualified Options, or as Awards or Purchases, so long as the
aggregate number of shares so issued does not exceed such maximum number, as
adjusted. If any Option granted under the Plan shall expire or terminate for any
reason without having been exercised in full or shall cease for any reason to be
exercisable in whole or in part, the unpurchased shares subject to such Options
and any unvested shares reacquired by the Company shall again be available for
grants of Stock Rights under the Plan.
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5. Granting of Stock Rights. Stock Rights may be granted under the Plan
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at any time after August 15, 1996 and prior to July 17, 2006. The date of grant
of a Stock Right under the Plan will be the date specified by the Committee at
the time it grants the Stock Right; provided, however, that such date shall not
be prior to the date on which the Committee acts to approve the grant. The
Committee shall have the right, with the consent of the optionee, to convert an
ISO granted under the Plan to a Non-Qualified Option pursuant to paragraph 14.
Nothing in the Plan shall be deemed to give any grantee of any Stock Right
the right to be retained in employment or other service by the Company or any
Related Corporation for any period of time.
6. Terms and Conditions of Stock Rights. Stock Rights shall be evidenced
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by instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments may be in the form of agreements to
be executed by both the Company and the individual or entity receiving the Stock
Right, or certificates, letters or similar instruments that need not be executed
by such individual or entity but acceptance of which will evidence agreement to
the terms thereof. Such instruments shall conform to the terms and conditions
set forth in the Plan and may contain such other provisions as the Committee
deems advisable which are not inconsistent with the Plan. Without limiting the
foregoing, such provisions may include such rights of refusal and repurchase
with respect to, and such other restrictions applicable to, shares of Common
Stock issuable upon exercise of Options, Awards and Purchases as the Committee
may deem appropriate. In granting any Non-Qualified Option, the Committee may
specify that such Non-Qualified Option shall be subject to the restrictions set
forth herein with respect to ISOs, or to such termination, cancellation or other
provisions as the Committee may determine.
The Committee may from time to time confer authority and responsibility on
one or more of its own members and/or one or more officers of the Company to
execute and deliver such instruments. The proper officers of the Company are
authorized and directed to take any and all action necessary or advisable from
time to time to carry out the terms of such instruments.
7. Option Duration. Subject to earlier termination as provided in
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paragraph 8, each Option shall expire on the date specified by the Committee and
set forth in the original instrument granting such Option, but not more than ten
(10) years from the date of grant. Notwithstanding the foregoing, in the case of
an ISO granted to an employee owning stock possessing more than ten percent
(10%) of the total combined voting power of all classes of stock of the Company
or any Related Corporation, such ISO shall expire not more than five (5) years
from the date of grant. A Non-Qualified Option shall expire on the date
specified in the original instrument granting such Non-Qualified Option, subject
to extension as determined by the Committee. ISOs, or any
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part thereof, that have been converted into Non-Qualified Options may be
extended as provided in paragraph 14.
8. Special Rules for ISO.
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A. Price for ISOs. The exercise price per share specified in the
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agreement relating to each ISO granted under the Plan shall not be less than the
fair market value per share of Common Stock on the date of such grant. In the
case of an ISO to be granted to an employee owning stock possessing more than
ten percent (10%) of the total combined voting power of all classes of stock of
the Company or any Related Corporation, the price per share specified in the
agreement relating to such ISO shall not be less than one hundred ten percent
(110%) of the fair market value per share of Common Stock on the date of grant.
B. $100,000 Annual Limitation on ISOs. Each eligible employee may be
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granted ISOs only to the extent that, in the aggregate under this Plan and all
incentive stock option plans of the Company and any Related Corporation, such
ISOs do not become exercisable for the first time by such employee during any
calendar year in a manner which would entitle the employee to purchase more than
$100,000 in fair market value (determined at the time the ISOs were granted) of
Common Stock in that year. Any options granted to an employee in excess of such
amount will be granted as Non-Qualified Options.
C. Determination of Fair Market Value. If, at the time an Option is
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granted under the Plan, the Company's Common Stock is publicly traded, "fair
market value" shall be determined as of the date on which such Option is granted
or, if prices or quotes discussed in this sentence are not available for that
date, as of the last business day for which such prices or quotes are available
immediately prior to the date such Option is granted, and shall mean:
(i) the average (on that date) of the high and low prices of the
Common Stock on the principal national securities exchange on
which the Common Stock is traded, if the Common Stock is then
traded on a national securities exchange; or
(ii) the last reported sale price (on that date) of the Common Stock
on the NASDAQ National Market List, if the Common Stock is not
then traded on a national securities exchange; or
(iii) the closing bid price (or average of bid prices) of the Common
Stock last quoted (on that date) by an established quotation
service for over-the-counter securities, if the Common Stock is
not then traded on a national securities exchange or reported on
the NASDAQ National Market List.
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However, if the Common Stock is not publicly traded at the time an Option is
granted under the Plan, "fair market value" shall be deemed to be the fair value
of the Common Stock as determined by the Committee after taking into
consideration all factors in good faith it deems appropriate, including, without
limitation, recent sale and offer prices of the Common Stock in private
transactions negotiated at arm's length.
D. Assignability. No ISO shall be assignable or transferable by the
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optionee except by will or by the laws of descent and distribution, and during
the lifetime of the optionee each Option shall be exercisable only by him. No
ISO, nor the right to exercise any portion thereof, shall be subject to
execution, attachment, or similar process, assignment, or any other alienation
or hypothecation. Upon any attempt to transfer, assign, pledge, hypothecate, or
otherwise dispose of any ISO, or of any right or privilege conferred thereby,
contrary to the provisions thereof or hereof or upon the levy of any attachment
or similar process upon any ISO, or any right or privilege conferred thereby,
such Option and such rights and privileges shall immediately become null and
void.
E. Death. If an ISO optionee ceases to be employed by the Company and
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all Related Corporations by reason of his death, or if the Employee dies within
the thirty (30) day period after the Employee ceases to be employed by the
Company and all Related Corporations, any ISO of his may be exercised, to the
extent of the number of shares with respect to which he could have exercised it
on the date of his death, by his estate, personal representative or beneficiary
who has acquired the ISO by will or by the laws of descent and distribution, at
any time prior to the earlier of the specified expiration date of the ISO or one
hundred and eighty (180) days from the date of the optionee's death.
F. Disability. If an ISO optionee ceases to be employed by the Company
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and all Related Corporations by reason of his disability, he shall have the
right to exercise any ISO held by him on the date of termination of employment,
to the extent of the number of shares with respect to which he could have
exercised it on that date, at any time prior to the earlier of the specified
expiration date of the ISO or one (1) year from the date of the termination of
the optionee's employment. For the purposes of the Plan, the term "disability"
shall mean "permanent and total disability" as defined in Section 22(e)(3) of
the Code or successor statute.
G. Other Termination of Employment. If an ISO optionee ceases to be
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employed by the Company and all Related Corporations other than by reason of
death or disability as defined in paragraph 8(F), no further installments of his
ISOs shall become exercisable, and his ISOs shall terminate after the passage of
three (3) months from the date of termination of his employment, but in no event
later than on their specified expiration dates, except to the extent that such
ISOs (or unexercised installments thereof) have been converted into Non-
Qualified Options pursuant to paragraph 14.
9. Exercise of Option. Subject to the provisions of paragraphs 6 and 8,
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each Option granted under the Plan shall be exercisable as follows:
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A. Vesting. The Option shall either be fully exercisable on the date
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of grant or shall become exercisable thereafter in such installments as the
Committee may specify. The Committee may also specify such other conditions
precedent as it deems appropriate to the exercise of an Option.
B. Full Vesting of Installments. Once an installment becomes
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exercisable it shall remain exercisable until expiration or termination of
the Option, unless otherwise specified by the Committee.
C. Partial Exercise. Each Option or installment may be exercised at
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any time or from time to time, in whole or in part, for up to the total
number of shares with respect to which it is then exercisable, provided
that the Committee may specify a certain minimum number or percentage of
the shares issuable upon exercise of any Option that must be purchased upon
any exercise.
D. Acceleration of Vesting. The Committee shall have the right to
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accelerate the date of exercise of any installment of any Option; provided
that the Committee shall not accelerate the exercise date of any
installment of any Option granted to any employee as an ISO (and not
previously converted into a Non-Qualified Option pursuant to paragraph 14)
if such acceleration would violate the annual vesting limitation contained
in Section 422(d) of the Code, as described in paragraph 8(B).
10. Adjustments. Upon the occurrence of any of the following events, an
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optionee's rights with respect to Options granted to him hereunder shall be
adjusted as hereinafter provided, unless otherwise specifically provided in the
written agreement between the optionee and the Company relating to such Option:
A. Stock Dividends and Stock Splits. If the shares of Common Stock shall
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be subdivided or combined into a greater or smaller number of shares or if the
Company shall issue any shares of Common Stock as a stock dividend on its
outstanding Common Stock, the number of shares of Common Stock deliverable upon
the exercise of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the purchase price
per share to reflect such subdivision, combination or stock dividend.
B. Consolidations, Mergers or Sales of Assets or Stock. If the Company
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is to be consolidated with or acquired by another person or entity in a merger,
sale of all or substantially all of the Company's assets or stock, or otherwise
(an "Acquisition"), the Committee or the board of directors of any entity
assuming the obligations of the Company hereunder (the "Successor Board") shall,
with respect to outstanding Options, shares acquired upon exercise of any
Option, Awards granted and Purchases made, take one or more of the following
actions:
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(i) make appropriate provision for the continuation of such Options
by substituting on an equitable basis for the shares then subject to such
Options the consideration payable with respect to the outstanding shares of
Common Stock in connection with the Acquisition;
(ii) accelerate the date of exercise of such Options or of any
installment of any such Options;
(iii) upon written notice to the optionees, provide that all Options
must be exercised, to the extent then exercisable, within a specified
number of days of the date of such notice, at the end of which period the
Options shall terminate;
(iv) terminate all Options in exchange for a cash payment equal to
the excess of the fair market value of the shares subject to such Options
(to the extent then exercisable) over the exercise price thereof; or
(v) in the event of a stock sale, require that the holder sell to
the purchaser to whom such stock sale is to be made, all shares previously
issued to the holder upon the exercise of any Option, all Awards granted
and all Purchases made, at a price equal to the portion of the net
consideration from such sale which is attributable to such shares.
C. Recapitalization or Reorganization. In the event of a
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recapitalization or reorganization of the Company (other than a transaction
described in subparagraph B above) pursuant to which securities of the Company
or of another corporation are issued with respect to the outstanding shares of
Common Stock, an optionee upon exercising an Option shall be entitled to receive
for the purchase price paid upon such exercise the securities he would have
received if he had exercised his Option prior to such recapitalization or
reorganization and had been the owner of the Common Stock receivable upon such
exercise at such time.
D. Modification of ISOs. Notwithstanding the foregoing, any adjustments
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made pursuant to the foregoing subparagraphs A, B or C with respect to ISOs
shall be made only after the Committee, after consulting with counsel for the
Company, determines whether such adjustments would constitute a "modification"
of such ISOs (as that term is defined in Section 424 of the Code or any
successor thereto) or would cause any adverse tax consequences for the holders
of such ISOs. If the Committee determines that such adjustments made with
respect to ISOs would constitute a modification of such ISOs or would cause any
adverse tax consequences for the holders of such ISOs, it may refrain from
making such adjustments.
E. Dissolution or Liquidation. In the event of the proposed dissolution
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or liquidation of the Company, each Option will terminate immediately prior to
the
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consummation of such proposed action or at such other time and subject to such
other conditions as shall be determined by the Committee.
F. Issuances of Securities. Except as expressly provided herein, no
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issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall affect, and no adjustment
by reason thereof shall be made with respect to, the number or price of shares
subject to Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company (and, in the case of securities
of the Company, such adjustments shall be made pursuant to the foregoing
subparagraph A).
G. Fractional Shares. No fractional shares shall be issued under the
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Plan and an optionee shall receive from the Company cash in lieu of such
fractional shares.
H. Adjustments. Upon the happening of any of the foregoing events
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described in subparagraphs A, B or C above, the class and aggregate number of
shares set forth in paragraph 4 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan shall also be
appropriately adjusted to reflect the events described in such subparagraphs.
The Committee or the Successor Board shall determine the specific adjustments to
be made under this paragraph 10 and its determination shall be conclusive.
If any person or entity owning Common Stock obtained by exercise of a Stock
Right made hereunder receives shares or securities or cash in connection with a
corporate transaction described in subparagraphs A, B or C above as a result of
owning such Common Stock, such shares or securities or cash shall be subject to
all of the conditions and restrictions applicable to the Common Stock with
respect to which such shares or securities or cash were issued, unless otherwise
determined by the Committee.
11. Means of Exercising Options. A Stock Right (or any part or
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installment thereof) shall be exercised by giving written notice to the Company
at its principal office address. Such notice shall identify the Stock Right
being exercised and specify the number of shares as to which such Stock Right is
being exercised, accompanied by full payment of the purchase price (if any)
therefor either
(a) in United States dollars in cash or by check, or
(b) at the discretion of the Committee, through delivery of shares of
Common Stock having a fair market value equal as of the date of
the exercise to the cash exercise price of the Stock Right, or
(c) at the discretion of the Committee, by delivery of the grantee's
personal recourse note bearing interest payable not less than
annually at no less than one hundred percent (100%) of the lowest
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applicable Federal rate, as defined in Section 1274(d) of the
Code, or
(d) at the discretion of the Committee, by any combination of (a),
(b) and (c) above.
If the Committee exercises its discretion to permit payment of the exercise
price of an ISO by means of the methods set forth in clauses (b), (c), or (d) of
the preceding sentence, such discretion shall be exercised in writing at the
time of the grant of the ISO in question.
The holder of a Stock Right shall not have the rights of a shareholder with
respect to the shares covered by his Stock Right until the date of issuance of a
stock certificate to him for such shares. Except as expressly provided above in
paragraph 10 with respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which the record
date is before the date such stock certificate is issued.
12. Conditions on Delivery of Common Stock. The Company will not be
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obligated to deliver any shares of Common Stock pursuant to the Plan or to
remove any restriction from shares previously delivered under the Plan
(a) until all conditions on the grant of a Stock Right have been
satisfied or removed,
(b) until, in the opinion of the Company's counsel, all applicable
federal and state laws and regulations have been complied with,
(c) if the outstanding Common Stock is at the time listed on any
stock exchange, until the shares have been listed or authorized
to be listed on any such exchange upon official notice of
issuance, and
(d) until all other legal matters in connection with the issuance and
delivery of such shares have been approved by the Company's
counsel.
If the sale of Common Stock has not been registered under the Securities Act of
1933, as amended, the Company may require, as a condition to exercise of a Stock
Right, such representations or agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and may require that the
certificates evidencing such Common Stock bear an appropriate legend restricting
transfer.
13. Term and Amendment of Plan. This Plan was adopted by the Board on
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July 17, 1996 and was approved by the stockholders of the Company on December 3,
1996. The Plan shall expire on July 16, 2006 (except that Stock Rights granted
prior to
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July 17, 2006 shall continue in force beyond such expiration date in accordance
with their terms). Subject to the provisions of paragraph 5 above, Stock Rights
may be granted under the Plan prior to the date of stockholder approval of the
Plan.
The Board may terminate or amend the Plan in any respect at any time,
except that, without the approval of the stockholders obtained within twelve
(12) months before or after the Board adopts a resolution authorizing any of the
following actions:
(a) the total number of shares that may be issued under the Plan may
not be increased (except by adjustment pursuant to paragraph 10);
(b) the provisions of paragraph 3 regarding eligibility for grants of
ISOs may not be modified;
(c) the provisions of paragraph 8(A) regarding the exercise price at
which shares may be offered pursuant to ISOs may not be modified
(except by adjustment pursuant to paragraph 10); and
(d) the expiration date of the Plan may not be extended.
Except as otherwise provided in this paragraph 13, in no event may action of the
Board, the Committee or stockholders alter or impair the rights of a grantee
under any Option previously granted to him, without his consent.
14. Conversion of ISOs into Non-Qualified Options; Termination of ISOs.
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The Committee, at the written request of any optionee, may in its discretion
take such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options. At
the time of such conversion, the Committee may impose such conditions on the
exercise of the resulting Non-Qualified Options as the Committee in its
discretion may determine, provided that such conditions shall not be
inconsistent with this Plan. Nothing in the Plan shall be deemed to give any
optionee the right to have such optionee's ISOs converted into Non-Qualified
Options, and no such conversion shall occur until and unless the Committee takes
appropriate action. The Committee, with the consent of the optionee, may also
terminate any portion of any ISO that has not been exercised at the time of such
termination.
15. Application of Funds. The proceeds received by the Company from the
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sale of shares pursuant to Options granted and Purchases authorized under the
Plan shall be used for general corporate purposes.
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16. Governmental Regulation. The Company's obligation to sell and deliver
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shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.
17. Withholding of Income Taxes. Upon the exercise of a Non-Qualified
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Option, the grant of an Award, the making of a Purchase of Common Stock for less
than its fair market value, the making of a Disqualifying Disposition (as
defined in paragraph 18) or the vesting of restricted Common Stock acquired on
the exercise of a Stock Right hereunder, the Company may require the optionee,
Award recipient, purchaser or shareholder to pay (through the withholding of a
sufficient number of shares of Common Stock, or otherwise) any federal, state,
local and foreign withholding taxes in respect of the amount that is considered
compensation includible in such person's gross income. The Committee in its
discretion may condition (i) the exercise of an Option, (ii) the grant of an
Award, (iii) the making of a Purchase of Common Stock for less than its fair
market value, and (iv) the vesting of restricted Common Stock acquired by
exercising a Stock Right, on such person's payment of such withholding taxes.
18. Notice to Company of Disqualifying Disposition. Each employee who
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receives an ISO must agree to notify the Company in writing immediately after
the employee makes a Disqualifying Disposition of any Common Stock acquired
pursuant to the exercise of an ISO. A Disqualifying Disposition is any
disposition (including any sale) of such Common Stock before the later of
(a) two (2) years after the date the employee was granted the ISO, or
(b) one (1) year after the date the employee acquired Common Stock by
exercising the ISO.
If the employee dies before such stock is sold, these holding period
requirements do not apply and no Disqualifying Disposition can occur thereafter.
19. Governing Law; Construction. The validity and construction of the
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Plan and the instruments evidencing Options shall be governed by the laws of the
jurisdiction in which the Company or its successors in interest is organized. In
construing this Plan, the singular shall include the plural and the masculine
gender shall include the feminine and neuter, unless the context otherwise
requires.
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