EXHIBIT 4.1
LARK TECHNOLOGIES, INC.
2000 STOCK OPTION PLAN
Lark Technologies, Inc., a Delaware corporation (the "Company"), sets
forth herein the terms of the 2000 Stock Option Plan (the "Plan") as follows:
1. PURPOSE
Under the Plan, Awards may be granted to Eligible Persons to purchase
shares of the Company's capital stock. The Plan is designed to enable the
Company to attract, retain and motivate its employees, consultants and others by
providing for or increasing the proprietary interests of such persons in the
Company.
2. DEFINITIONS
For purposes of interpreting the Plan and related documents (including
Agreements), the following definitions shall apply:
2.1. "AFFILIATE" means the Company and any company or other trade or
business that is controlled by or under common control with the Company,
determined in accordance with the principles of Section 414(b) and 414(c) of the
Code and the regulations thereunder, or is an affiliate of the Company within
the meaning of Rule 405 of Regulation C under the Securities Act.
2.2. "AGREEMENT" means the award agreement under which the Grantee accepts
the Award terms and conditions and receives an Award pursuant to the Plan.
2.3. "AWARD" means individually, collectively or in tandem, an incentive
award granted under the Plan, whether in the form of Options, Restricted Stock
Awards, or performance shares, or such other form and subject to such terms as
the Committee may determine.
2.4. "AWARD PRICE" means the purchase price for each share of Common Stock
subject to an Award.
2.5. "BOARD" means the Board of Directors of the Company.
2.6. "CODE" means the Internal Revenue Code of 1986, as amended. Any
section thereof referenced in the Plan or an Agreement shall include the rules
and regulations thereunder, and any successor provisions thereto.
2.7. "COMMITTEE" means the Compensation Committee of the Board, which must
consist of no fewer than two members of the Board who satisfy the definition
under Rule 16b-3 of the Exchange Act for "nonemployee director".
2.8. "COMMON STOCK" means common stock, par value $0.001, issued by the
Company.
2.9. "COMPANY" means Lark Technologies, Inc., a Delaware corporation, any
Affiliates and any other entity as determined by the Committee.
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2.10. "EFFECTIVE DATE" means May 10, 2000, the date of adoption of the
Plan by the Board.
2.11. "ELIGIBLE PERSON" is defined in Section 5.
2.12. "EMPLOYER" means the Company.
2.13. "EXCHANGE ACT" means the Securities Exchange Act of 1934, as now in
effect or as hereafter amended. Any section thereof referenced in the Plan or an
Agreement shall include the rules and regulations thereunder, and any successor
provisions thereto.
2.14. "FAIR MARKET VALUE" means the value of each share of Common Stock
subject to the Plan determined as follows: (a) if on the Grant Date or other
determination date the shares of Common Stock are listed on an established
national or regional stock exchange, are admitted to quotation on the National
Association of Securities Dealers Automated Quotation System, or are publicly
traded on an established securities market, the Fair Market Value of the shares
of Common Stock shall be the weighted average closing price of the shares of
Common Stock on such exchange or in such market over the 30 trading days
immediately preceding the Grant Date or such other determination date (or if
there are no such reported closing prices, the Fair Market Value shall be the
average of the mean between the highest bid and lowest asked prices or between
the high and low sale prices on such trading days); and (b) if the shares of
Common Stock are not listed on such an exchange, quoted on such System or traded
on such a market, Fair Market Value shall be determined by the Board or
Committee in good faith.
2.15. "GRANT DATE" means for a particular Award (i) the date as of which
the Committee approves the Award or (ii) any other date specified by the
Committee, if any.
2.16. "GRANTEE" means an individual to whom one or more Awards have been
granted.
2.17. "INCENTIVE STOCK OPTION" or "ISO" means an incentive stock option
within the meaning of Section 422 of the Code. Any Option that is not
specifically designated as an Incentive Stock Option shall under no
circumstances be considered an Incentive Stock Option.
2.18. "NONQUALIFIED STOCK OPTION" means any Option that does not qualify
under Section 422 of the Code.
2.19. "OPTION" means an option granted by the Company to purchase Common
Stock pursuant to the provisions of the Plan, including ISOs and Nonqualified
Stock Options.
2.20. "OPTION TERM" means the period defined under Section 12 herein.
2.21. "PLAN" means this Lark Technologies, Inc. 2000 Stock Option Plan, as
amended.
2.22. "RESTRICTED PERIOD" means the period of time from the date of grant
of Restricted Stock until the lapse of restrictions attached thereto under the
terms of the Agreement granting such Restricted Stock, pursuant to the
provisions of the Plan or by action of the Committee.
2.23. "RESTRICTED STOCK" shall mean an Award granted by the Committee
entitling the Grantee to acquire, at no cost or for a purchase price determined
by the Committee at the time of grant, shares of Common Stock which are subject
to restrictions in accordance with the provisions hereof.
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2.24. "SECURITIES ACT" means the Securities Act of 1933, as now in effect
or as hereafter amended. Any section thereof referenced in the Plan or an
Agreement shall include the rules and regulations thereunder, and any successor
provisions thereto.
2.25. "STOCKHOLDER" means a holder of record of at least one share of the
voting stock of the Company.
2.26. "TERMINATION OF EMPLOYMENT" means that event when a person is no
longer employed by or continuously providing services to the Company or any
Affiliate as an employee, advisor, consultant or otherwise. The Committee may in
its discretion determine (a) whether any leave of absence constitutes a
termination of employment for purposes of the Plan; (b) the impact, if any, of
any such leave of absence on awards theretofore made under the Plan; and (c)
when a change in a nonemployee's association with the Company constitutes a
termination of employment for purposes of the Plan. Such determinations of the
Committee shall be final, binding and conclusive.
3. ADMINISTRATION
3.1 ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Board until such time as the Board
appoints the Committee as the administrator of the Plan.
3.2 SCOPE OF AUTHORITY
The Committee shall have the full power and authority to take all actions
and to make all determinations required or provided for under the Plan, any
Award granted or Agreement entered into hereunder, and all such other actions
and determinations not inconsistent with the specific terms and provisions of
the Plan deemed by the Committee to be necessary or appropriate to the
administration of the Plan, any Award or Agreement entered into hereunder.
Actions of the Committee shall be taken by the vote of a majority of its
members; provided, however, that the Plan shall be administered so that Awards
granted under the Plan will qualify for the benefits provided by Rule 16b-3 (or
any successor rule) under the Exchange Act and Section 162(m) of the Code, and
the regulations thereunder to the extent the Committee intends such grant to
qualify under Section 162(m). The interpretation and construction by the
Committee of any provision of the Plan or of any Award granted or Agreement
entered into hereunder shall be final and conclusive.
3.3 NO LIABILITY
No member of the Board or of the Committee shall be liable for any action
or determination made, or any failure to take or make an action or
determination, in good faith with respect to the Plan or any Option granted or
Agreement entered into hereunder.
4. AWARDS; COMMON STOCK
4.1 Awards
Awards granted under the Plan may be Incentive Stock Options, Nonqualified
Stock Options, Restricted Stock and performance shares, all as more fully set
forth herein. No Incentive Stock Option may be granted to a person who is not an
employee of the Company on the date of grant. Unless otherwise specified in a
particular grant, Awards granted under the Plan are intended to qualify as
performance-based compensation for the purposes of Section 162(m) of the Code.
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4.2 COMMON STOCK
The stock that may be issued pursuant to Awards granted under the Plan
shall be Common Stock, which shares may be treasury shares or authorized but
unissued shares. The number of shares of Common Stock that may be issued
pursuant to Awards granted under the Plan shall not exceed in the aggregate
1,000,000 shares of Common Stock, which number of shares is subject to
adjustment and increase. If any Award expires, terminates or is terminated for
any reason prior to exercise in full, the shares of Common Stock that were
subject to the unexercised portion of such Award shall be available for future
Awards granted under the Plan. When the exercise price for an Award under this
Plan is paid with previously outstanding shares or with shares as to which the
Award is being exercised, as permitted in Section 12, only the number of shares
of stock issued net of the shares of stock tendered shall be deemed delivered
for purposes of determining the maximum number of shares of Stock available for
delivery under the Plan. Shares of stock delivered under the Plan in settlement,
assumption or substitution of outstanding awards (or obligations to grant future
awards) under the plans or arrangements of another entity shall not reduce the
maximum number of shares of stock available for delivery under the Plan, to the
extent that such settlement, assumption or substitution is as a result of the
Company or an Affiliate acquiring another entity (or an interest in another
entity).
5. ELIGIBILITY
Awards may be granted under the Plan to all current and former directors,
officers and executive, administrative, technical or professional employees of
the Company; to current and former consultants of the Company; and to any other
individual whose participation in the Plan is determined to be in the best
interests of the Company by the Committee (collectively, "Eligible Persons"). An
individual may hold more than one Award, subject to such restrictions as are
provided herein.
6. EFFECTIVE DATE AND PLAN TERM
6.1 EFFECTIVE DATE
The Plan is effective as of May 10, 2000, the date of adoption by the
Board, subject to Stockholders' approval of the Plan within one year of such
Effective Date by a majority of the votes cast at a duly held meeting of the
Stockholders of the Company at which a quorum representing a majority of all
outstanding Common Stock is present, either in person or by proxy, and voting on
the matter, or by written consent in accordance with applicable state law and
the Articles of Incorporation and By-Laws of the Company and in a manner that
satisfies the requirements of Section 162(m) of the Code; provided, however,
that upon approval of the Plan by the Stockholders of the Company, all Awards
granted under the Plan on or after the Effective Date shall be fully effective
as if the Stockholders of the Company had approved the Plan on the Effective
Date. If the Stockholders fail to approve the Plan within one year of such
Effective Date, any Awards granted hereunder shall be null, void and of no
effect.
6.2 TERM
The Plan shall terminate on the date ten (10) years after the Effective
Date.
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7. GRANT OF AWARDS
7.1 AWARDS
The Committee shall determine the type or types of Awards to be made to
each Grantee. Awards may be granted singly, in combination or in tandem subject
to restrictions set forth herein. Without limiting the foregoing, the Committee
may at any time amend the terms of outstanding Awards or issue new Awards in
exchange for the surrender and cancellation of outstanding Awards. The date on
which the Committee approves the Award shall be considered the date on which
such Award is granted, unless the Committee approves a separate grant date. The
terms and conditions of the Awards granted under this Section shall be
determined from time to time by the Committee, as set forth in the Agreement,
and the conditions herein.
7.2 NONQUALIFIED OPTIONS
The Award Price for each share of Common Stock issuable pursuant a
Nonqualified Stock Option shall be set by the Committee, but may not be less
than par value.
7.3 INCENTIVE STOCK OPTIONS
The Award Price for each share of Common Stock issuable pursuant to an
Incentive Stock Option may not be less than the Fair Market Value on the Grant
Date.
7.4 INCENTIVE STOCK OPTIONS - SPECIAL RULES
Options granted in the form of ISOs shall be subject to the following
provisions:
(a) No Incentive Option shall be granted pursuant to this plan more
than ten (10) years after the Effective Date.
(b) An Option shall constitute an ISO only to the extent that the
aggregate Fair Market Value (determined at the time the Option is granted)
of the Common Stock with respect to which ISOs are exercisable for the
first time by any Grantee during any calendar year under the Plan and all
other plans of the Grantee's employer Company and its parent and
Affiliates does not exceed $100,000. This limitation shall be applied by
taking Options into account in the order in which such Options were
granted.
(c) If any Grantee to whom an ISO is to be granted pursuant to the
provisions of the Plan is, on the date of grant, an individual described
in Section 422(b)(6) of the Code, then the following special provisions
shall be applicable to the Option granted to such individual:
(i) the Award Price of shares subject to such ISO shall not be
less than 110% of the Fair Market Value of Common Stock on the date
of grant; and
(ii) the Option shall not have a term in excess of five (5)
years from the date of grant.
7.5 CHANGES IN LAW
The Committee may establish rules with respect to, and may grant to
Eligible Persons, Options to comply with any amendment to the Code made after
the Effective Date.
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8. AGREEMENTS
All Awards granted pursuant to the Plan shall be evidenced by written
Agreements in such form or forms as the Committee shall from time to time
determine. Agreements covering Awards need not contain similar provisions;
provided, however, that all such Agreements shall comply with the terms of the
Plan and all applicable laws and regulations. By accepting an Award pursuant to
the Plan, a Grantee thereby agrees that the Award shall be subject to all of the
terms and provisions of the Plan and the applicable Agreement.
9. RESTRICTED STOCK
The Committee may in its sole discretion grant Restricted Stock to
Eligible Persons, subject to the following provisions. At the time a grant of
Restricted Stock is made, the Committee shall establish a period of time (the
"Restricted Period") applicable to such Restricted Stock. Each grant of
Restricted Stock may be subject to a different Restricted Period. The Committee
may, in its sole discretion, at the time a grant of Restricted Stock is made,
prescribe restrictions in addition to or other than the expiration of the
Restricted Period, including the satisfaction of corporate or individual
performance objectives, which may be applicable to all or any portion of the
Restricted Stock. Such performance objectives shall be established in writing by
the Committee prior to the ninetieth day of the year in which the grant is made
and while the outcome is substantially uncertain. Performance objectives shall
be based on Common Stock price, market share, sales, earnings per share, return
on equity or costs.
Performance objectives may include positive results, maintaining the
status quo or limiting economic losses. The Committee also may, in its sole
discretion, shorten or terminate the Restricted Period or waive any other
restrictions applicable to all or a portion of the Restricted Stock. Restricted
Stock may not be sold, transferred, assigned, pledged or otherwise encumbered or
disposed of during the Restricted Period or prior to the satisfaction of any
other restrictions prescribed by the Committee with respect to such Restricted
Stock.
9.1 RESTRICTIONS
A Common Stock certificate representing the number of shares of Restricted
Stock granted shall be held in custody by the Company for the Grantee's account.
The Grantee shall have all rights and privileges of a Stockholder as to such
Restricted Stock, including the right to receive dividends and the right to vote
such shares, except that subject to the provisions below, the following
restrictions shall apply: (i) The Grantee shall not be entitled to delivery of
the certificate until the expiration of the Restricted Period; (ii) none of the
shares of Restricted Stock may be sold, transferred, assigned, pledged or
otherwise encumbered or disposed of during the Restricted Period; (iii) the
Grantee shall, if requested by the Company, execute and deliver to the Company,
a Common Stock power endorsed in blank. If a Termination of Employment occurs
with respect to a Grantee prior to the expiration of the Restricted Period
applicable to such shares, shares of Restricted Stock still subject to
restrictions shall be forfeited unless otherwise determined by the Committee,
and all rights of the Grantee to such shares shall terminate without further
obligation on the part of the Company.
9.2 DELIVERY OF RESTRICTED SHARES
At the end of the Restricted Period, a Common Stock certificate for the
number of shares of Restricted Stock with respect to which the restrictions have
lapsed shall be delivered (less any amount in satisfaction of any withholding
obligation), free of all such restrictions, except applicable securities laws,
to the Grantee. The Company shall not be required to deliver any fractional
shares of Common Stock but shall pay, in lieu thereof, the Fair Market Value (as
of the date the restrictions lapse) of such fractional share to the Grantee.
Notwithstanding the foregoing, the Committee may authorize the delivery of the
Restricted Stock to a Grantee during the Restricted Period, in which event any
Common Stock certificates in respect of any shares of Restricted Stock thus
delivered to a Grantee during the Restricted Period applicable to such shares
shall bear an appropriate legend referring to the terms and conditions,
including the restrictions, applicable thereto.
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10. PERFORMANCE SHARES
The Committee may in its sole discretion grant performance share awards to
such individuals and under such terms and conditions as the Committee shall
determine, subject to the provisions of the Plan. Such an award shall entitle a
Grantee to acquire shares of Common Stock of the Company, or to be paid the
value thereof in cash, as the Committee shall determine, if specified
performance goals are met. Performance shares may be awarded independently of or
in connection with any other Award under the Plan. The Grantee of a performance
share award will have the rights of a shareholder only as to shares for which a
certificate has been issued pursuant to the award and not with respect to any
other shares subject to the award. Except as otherwise may be provided by the
Committee at any time prior to Termination of Employment, the rights of a
Grantee of a performance share award shall automatically terminate upon the
Grantee's Termination of Employment for any reason.
11. AWARD PRICE
The purchase price of each share of Common Stock subject to an Award shall
be fixed by the Committee and stated in each Agreement.
12. TERM, VESTING AND EXERCISE OF AWARDS
12.1 TERM
Each Award granted under the Plan shall terminate and all rights to
purchase Common Stock thereunder shall cease upon the expiration of ten (10)
years from the Grant Date, as otherwise provided herein, or on such date prior
thereto as may be fixed by the Committee and stated in the Agreement relating to
such Award; provided, however, that in the event the Grantee would otherwise be
ineligible to receive an Incentive Stock Option by reason of the provisions of
Sections 422(b)(6) and 424(d) of the Code (relating to Common Stock ownership of
more than 10 percent), an Option granted to such Grantee which is intended to be
an Incentive Stock Option shall in no event be exercisable after the expiration
of five years from the Grant Date (collectively, the "Option Term").
12.2 VESTING
Unless otherwise expressly provided herein or in an Agreement approved by
the Committee, Options granted hereunder shall become vested at the following
schedule so long as the Grantee has not experienced a Termination of Employment
prior to such anniversary date: no more than 25% of the total number of shares
optioned on the first anniversary of the Grant Date; no more than 50% of the
total number of shares optioned on the second anniversary of the Grant Date; no
more than 75% of the total number of shares optioned on the third anniversary of
the Grant Date; and 100% of the total number of shares optioned on and after the
fourth anniversary of the Grant Date. Options that have not vested may not be
exercised. All Awards that have not vested prior to Termination of Employment
shall terminate and be of no further force and effect upon such Termination of
Employment.
12.3 EXERCISE BY GRANTEE
Only the Grantee receiving an Award (or, in the event of the Grantee's
legal incapacity or incompetency, the Grantee's guardian or legal
representative, and in the case of the Grantee's death, the Grantee's estate)
may exercise the Award.
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12.4 LIMITATIONS ON EXERCISE AND SALE; FORFEITURE
The Committee, subject to the terms and conditions of the Plan, may in its
sole discretion provide in an Agreement that an Option may not be exercised in
whole or in part for any period or periods of time during which such Option is
outstanding as the Committee shall determine (and as set forth in the Agreement
relating to such Option). Any such limitation on the exercise of an Option
contained in any Agreement may be rescinded, modified or waived by the
Committee, in its sole discretion, at any time and from time to time after the
date of grant of such Option. The Committee may also include such other terms
and conditions as it deems effect the purpose of the Plan and are in the best
interest of the Company.
12.5 METHOD OF EXERCISE
(a) An Award that is exercisable hereunder may be exercised by
delivery to the Company on any business day, at its principal office
addressed to the attention of the Committee (or such other person
identified in an Agreement), of written notice of exercise, which notice
shall specify the number of shares for which the Award is being exercised,
and shall be accompanied by payment in full of the Award Price of the
shares of Common Stock for which the Award is being exercised. Payment of
the Award Price for the shares of Common Stock purchased pursuant to the
exercise of an Award shall be made, as determined by the Committee and set
forth in the Agreement pertaining to an Award, (i) in cash or by check
payable to the order of the Company; (ii) to the extent the Company is not
prohibited from purchasing or acquiring shares of Common Stock, through
the tender to the Company of shares of Common Stock, which shares shall be
valued, for purposes of determining the extent to which the Award Price
has been paid thereby, at their Fair Market Value on the date of exercise;
or (iii) by a combination of the methods described in Sections 12.5(a)(i)
and (ii) hereof, or such other method permitted by the Committee;
provided, however, that the Committee may in its discretion at any time
impose such limitations or prohibitions on the use of shares of Common
Stock to exercise Awards as it deems appropriate. If and while payment
with Common Stock is permitted for the exercise of an Award granted under
this Plan in accordance with the foregoing provision, the instrument
evidencing the Award may also provide that, in lieu of using previously
outstanding shares therefor, the Grantee may pay the Award Price by
directing the Company to retain so many of the underlying shares as have a
market value on the date of exercise equal to the Award Price, and any
such exercise will cause the surrender and cancellation of the Award to
the extent of the shares so retained by the Company.
As soon as practical after receipt of the foregoing written notice
of exercise, full payment of the Award Price, and full payment of all
amounts due to satisfy any applicable tax withholding requirements (which
the Grantee shall be required to pay in cash, rather than by application
of shares of Common Stock otherwise deliverable upon exercise of the
Award), the Company shall deliver to the Grantee, in the Grantee's name, a
certificate evidencing the number of shares of Common Stock purchased upon
exercise of the Award. Any attempt to exercise any Award granted hereunder
other than as set forth above shall be invalid and of no force and effect.
An Agreement may provide that payment in full of the Award Price
need not accompany the written notice of exercise provided the notice
directs that the Common Stock certificate or certificates for the shares
for which the Award is exercised be delivered to a licensed broker
acceptable to the Company as the agent for the individual exercising the
Award and, at the time such Common Stock certificate or certificates are
delivered, the broker tenders to the Company cash (or cash equivalents
acceptable to the Company) equal to the Award Price.
(b) Except as provided in Section 9.1, an individual holding or
exercising an Award shall have none of the rights of a Stockholder until
the shares of Common Stock covered thereby are fully paid and issued to
such individual and, except as provided in Section 20 hereof, no
adjustment shall be made for dividends or other rights for which the
record date is prior to the date of such issuance.
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12.6 FINANCIAL ASSISTANCE
The Company is vested with authority under this Plan to assist any
employee to whom an Award is granted hereunder in the payment of the Award Price
payable on exercise of the Award, by lending part or all of the amount of such
Award Price to such employee on such terms and at such rates of interest and
upon such security (or no security) as shall have been authorized by or under
authority of the Committee. The Company is under no obligation to provide such
assistance, however.
13. TRANSFERABILITY OF AWARDS
Unless otherwise expressly provided in an Agreement, no Award granted
under the Plan may be sold, transferred, pledged, assigned, hypothecated or
otherwise alienated, other than by will or by the laws of descent and
distribution or pursuant to a qualified domestic relations order, as defined
under the Code or the Employee Retirement Income Security Act, as amended, or
the rules thereunder. The designation of a beneficiary with respect to an Award
shall not constitute a transfer for purposes of this Section.
14. TERMINATION OF EMPLOYMENT
In the case of Termination of Employment (other than a Dismissal for
Cause), unless otherwise provided in an Agreement and other than upon death or
Disability (as hereafter defined), Awards otherwise exercisable on the date of
the Termination of Employment will remain exercisable for a period equal to the
shorter of three (3) months or the remaining Award Term. If, on the date of the
Termination of Employment, the Grantee is not entitled to exercise the Grantee's
entire Award, the Common Stock covered by the unexercisable portion of the Award
shall revert to the Plan. If, after Termination of Employment, the Grantee does
not exercise the Award within the time prescribed, the Award shall terminate and
the Common Stock covered by such Award shall revert to the Plan. For purposes of
the Plan, a Termination of Employment with the Company or an Affiliate shall not
be deemed to occur if the Grantee is immediately thereafter employed with the
Company or any Affiliate.
Notwithstanding any other provision in this Plan or an Agreement, in the
event that a Grantee's employment is terminated by reason of a Dismissal for
Cause, the Award shall expire on the day immediately preceding the date of the
first event giving rise to a Dismissal for Cause. "Dismissal for Cause" means
Termination of Employment for: (a) theft or embezzlement of property of the
Company; (b) fraud or other wrongdoing against the Company; (c) commission of a
crime of moral turpitude; (d) receipt of consideration or acceptance of benefits
from, or the participation in business activities with, persons doing business
with the Company in violation of the business ethics of the Company; (e)
malicious destruction of property of the Company; (f) improper disclosure of
confidential information of the Company; (g) actively engaging in or working for
a business in competition with the Company while employed by the Company; or (h)
such other reason that has a material adverse effect on the Company. The
Committee shall have the sole discretion to determine whether a Termination of
Employment has occurred by reason of Dismissal for Cause.
15. RIGHTS IN THE EVENT OF DEATH OR DISABILITY
15.1 DEATH
If a Grantee dies while employed by the Company or an Affiliate, the
executors, administrators, legatees or distributees of such Grantee's estate
shall have the right (subject to the general limitations on exercise set forth
in Section 12 hereof), at any time within one (1) year (unless otherwise
provided in an Agreement) after the date of such Grantee's death and prior to
the end of the Award Term, to exercise any Award held by such Grantee at the
date of such Grantee's death, to the extent such Award was otherwise exercisable
immediately prior to such Grantee's death.
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15.2 DISABILITY
If a Grantee experiences a Termination of Employment with the Company or
an Affiliate by reason of a "permanent and total disability" within the meaning
of Section 22(e)(3) of the Code ("Disability") of such Grantee, then such
Grantee shall have the right (subject to the general limitations on exercise set
forth in Section 12 hereof), at any time within one (1) year (unless otherwise
provided in an Agreement) after such Termination of Employment and prior to the
expiration of the Award Term, to exercise, in whole or in part, any Award held
by such Grantee at the date of such Termination of Employment, to the extent
such Award was exercisable immediately prior to such Termination of Employment.
16. USE OF PROCEEDS
The proceeds received by the Company from the sale of Common Stock
pursuant to Awards granted under the Plan shall constitute general funds of the
Company.
17. SECURITIES LAWS
The Company shall not be required to sell or issue any Award or shares of
Common Stock under any Award if the sale or issuance of such Award or shares
would constitute a violation of any provisions of any law or regulation of any
governmental authority, including, without limitation, any federal or state
securities laws or regulations. If at any time the Company shall determine, in
its discretion, that the listing, registration or qualification of any shares
subject to the Award upon any securities exchange or under any state or federal
law, or the consent of any government regulatory body, is necessary or desirable
as a condition of, or in connection with, the issuance or purchase of shares,
the Award may not be exercised in whole or in part unless such listing,
registration, qualification, consent or approval shall have been effected or
obtained free of any conditions not acceptable to the Company, and any delay
caused thereby shall in no way affect the date of termination of the Award.
Specifically in connection with the Securities Act, upon exercise of any Award,
unless a registration statement under the Securities Act is in effect with
respect to the shares of Common Stock covered by such Award, the Company shall
not be required to sell or issue such shares unless the Company has received
evidence satisfactory to the Company that the Grantee may acquire such shares
pursuant to an exemption from registration under the Securities Act. Any
determination in this connection by the Company shall be final and conclusive.
The Company may, but shall in no event be obligated, to register any securities
covered hereby pursuant to the Securities Act. The Company shall not be
obligated to take any affirmative action in order to cause the exercise of an
Award or the issuance of shares pursuant thereto to comply with any law or
regulation of any governmental authority. As to any jurisdiction that expressly
imposes the requirement that an Award shall not be exercisable unless and until
the shares of Common Stock covered by such Award are registered or are subject
to an available exemption from registration, the exercise of such Award (under
circumstances in which the laws of such jurisdiction apply) shall be deemed
conditioned upon the effectiveness of such registration or the availability of
such an exemption.
18. EXCHANGE ACT: RULE 16B-3
18.1 GENERAL
The Plan is intended to comply with Rule 16b-3 (and any successor thereto)
("Rule 16b-3") under the Exchange Act. Any provision or action inconsistent with
Rule 16b-3 shall, to the extent permitted by law and determined to be advisable
by the Committee, be inoperative and void.
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18.2 RESTRICTION ON TRANSFER OF COMMON STOCK
Unless otherwise permitted under an exemption under Rule 16b-3, no officer
or other "insider" of the Company subject to Section 16 of the Exchange Act
shall be permitted to sell Common Stock (which such "insider" had received upon
exercise of an Award) during the six months immediately following the grant of
such Award.
19. AMENDMENT AND TERMINATION
The Board may, at any time and from time to time, amend, suspend or
terminate the Plan or an Agreement governing any Award that has not vested.
Except as permitted under this Plan, no amendment, suspension or termination of
the Plan or an Agreement shall, without the consent of the Grantee, alter or
impair rights or obligations under any vested Award.
20. EFFECT OF CHANGES IN CAPITALIZATION
20.1 CHANGES IN COMMON STOCK
If the shares of Common Stock are changed into or exchanged for a
different number or kind of shares or securities of the Company, whether through
reorganization, recapitalization, reclassification, stock dividend or other
distribution, split, reverse split, combination of interest, exchange of
interests, change in corporate structure or the like, an appropriate and
proportionate adjustment shall be made in the number and kind of shares of
Common Stock subject to the Plan and in the number, kind and per share exercise
price of shares of Common stock subject to unexercised Awards, or portions
thereof granted prior to any such change. In the event of any such adjustment in
an outstanding Award, the Grantee thereafter shall have the right to purchase
the number of shares of Common Stock under such Award at the per share price, as
so adjusted, which the Grantee could purchase at the total purchase price
applicable to the Award immediately prior to such adjustment.
20.2 REORGANIZATION WITH COMPANY SURVIVING
Subject to Section 19, if the Company shall be the surviving entity in any
reorganization, merger, consolidation or the like of the Company with one or
more other entities, any Award theretofore granted pursuant to the Plan shall
apply to the securities resulting immediately following such reorganization,
merger, consolidation or the like, with a corresponding proportionate adjustment
of the number of shares and Award Price per share so that the aggregate number
of shares and Award Price thereafter shall be the same as the aggregate share
number and Award Price immediately prior to such reorganization, merger,
consolidation or the like.
20.3 OTHER REORGANIZATIONS; SALE OF ASSETS OR COMMON STOCK
Unless otherwise provided in an Agreement, upon the dissolution or
liquidation of the Company, or upon a merger, consolidation or reorganization of
the Company with one or more other entities in which the Company is not the
surviving entity, or upon a sale of substantially all of the assets of the
Company to another entity, or upon any transaction (including, without
limitation, a merger or reorganization in which the Company is the surviving
entity) approved by the Board that results in any person or entity (other than
persons who are holders of Common Stock of the Company at the time the Plan is
approved by the Stockholders and other than an Affiliate) owning fifty (50)
percent or more of the combined voting power of all classes of Common Stock of
the Company (in any event, each a "Liquidation Event"), the Plan and all Awards
outstanding hereunder shall terminate on the date of such transaction, except to
the extent provision is made in connection with such transaction for the
continuation of the Plan and/or the assumption of the Awards theretofore
granted, or for the substitution for such Awards of new awards covering the
Common Stock of a successor entity, or a parent or Affiliate thereof, with
appropriate adjustments as to the number and kinds of shares and exercise
prices, in which event the Plan and Awards theretofore granted shall continue in
the manner
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and under the terms so provided. In the event of any such Liquidation Event,
each Grantee shall have the right (subject to the general limitations on
exercise set forth in Section 12 hereof and except as otherwise specifically
provided in the Agreement relating to such Award), immediately prior to the
occurrence of such Liquidation Event and during such period occurring prior to
such Liquidation Event as the Committee in its sole discretion shall designate,
to exercise such Award in whole or in part, to the extent such Award was
otherwise exercisable at the time such Liquidation Event occurs. The Committee
shall send written notice of an event that will result in a Liquidation Event to
all Grantees not later than the time at which the Company gives notice thereof
to its Stockholders. Notwithstanding anything herein to the contrary, the
Committee in its discretion may provide for the acceleration of the vesting of
any Award in the case of a merger, a significant sale of the common stock or
assets of the Company (as determined by the Committee).
20.4 ADJUSTMENTS
Adjustments under this Section 20 relating to Common Stock or securities
of the Company shall be made by the Committee, whose determination in that
respect shall be final and conclusive. No fractional shares of Common Stock or
units of other securities shall be issued pursuant to any such adjustment, and
any fractions resulting from any such adjustment shall be eliminated in each
case by rounding downward to the nearest whole share or unit.
20.5 NO LIMITATIONS ON COMPANY
The grant of an Award pursuant to the Plan shall not affect or limit in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate, or to sell or
transfer all or any part of its business or assets.
21. WITHHOLDING
The Company or an Affiliate may be obligated to withhold federal and local
income taxes and Social Security taxes to the extent that a Grantee realizes
income in connection with the exercise of an Award. The Company or an Affiliate
may withhold amounts needed to cover such taxes from payments otherwise due and
owing to a Grantee, and upon demand the Grantee will promptly pay to the Company
or an Affiliate having such obligation any additional amounts as may be
necessary to satisfy such withholding tax obligation. Such payment shall be made
in cash or cash equivalents. The Company may also withhold shares or amounts
payable to a Grantee pursuant to court order.
22. DISCLAIMER OF RIGHTS
The existence of this Plan does not, and no provision in the Plan or in
any Award granted or Agreement entered into pursuant to the Plan shall be
construed to, create an employment contract; confer upon any individual the
right to receive an Award; permit a Grantee to remain in the employ of the
Company or alter a Grantee's status as an at-will employee; or allow the Grantee
to interfere in any way with the right and authority of the Company either to
increase or decrease the compensation of any individual at any time, or to
terminate any employment or other relationship between any individual and the
Company. The obligation of the Company to pay any benefits pursuant to the Plan
shall be interpreted as a contractual obligation to pay only those amounts
described herein, in the manner and under the conditions prescribed herein. The
Plan shall in no way be interpreted to require the Company to transfer any
amounts to a third party trustee or otherwise hold any amounts in trust or
escrow for payment to any Grantee or beneficiary under the terms of the Plan.
23. NONEXCLUSIVITY
Neither the adoption of the Plan nor the submission of the Plan to the
Stockholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable either
generally to a class or classes of
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individuals or specifically to a particular individual or individuals) as the
Board in its discretion determines desirable, including, without limitation, the
granting of Common Stock options otherwise than under the Plan.
24. GOVERNING LAW
This Plan and all Agreements shall be executed and performed under, and
all Awards to be granted hereunder shall be provided under and governed by, the
laws of the State of Texas (but not including the choice of law rules thereof).
Any controversy, dispute or claim arising out of, in connection with, or in
relation to, the interpretation, performance or breach of this Plan or any
Agreement which cannot first be settled through ordinary negotiation between the
parties shall be submitted to binding and final arbitration conducted in
Houston, Texas by and in accordance with the then existing Rules for Commercial
Arbitration of the American Arbitration Association or any successor
organization. Any such arbitration shall be to a three member panel selected
through the rules governing selection and appointment of such panels of the
American Arbitration Association or any successor organization. The award
rendered by the arbitrators may be confirmed, entered and enforced as a judgment
in any court of competent jurisdiction; however, the parties otherwise waive any
rights to appeal the award except with regard to fraud by the panel. The
arbitrators shall award the party which substantially prevails in any
arbitration proceeding recovery of that party's attorneys' fees, the
arbitrators' fees and all costs in connection with the arbitration from the
party who does not substantially prevail.
25. BINDING EFFECT
Subject to all restrictions provided in this Plan and all applicable laws,
this Plan and all Agreements hereunder shall be binding on and inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, successors and assigns.
26. MISCELLANEOUS REQUIREMENTS
26.1 OTHER AWARD PROVISIONS
Awards granted under the Plan shall contain such other terms and
provisions that are not inconsistent with this Plan as the Committee may
authorize in its discretion, providing for (a) special vesting schedules
governing the exercisability of an Award; (b) provisions for acceleration of
such vesting schedules in certain events; (c) arrangements whereby the Company
may fulfill any tax obligations for employees in connection with an Award; (d)
provisions imposing restrictions upon the transferability of stock acquired on
exercise of such Award, whether required by this Plan or applicable securities
laws or imposed for other reasons; and (e) provisions regarding the termination
or survival of any such Award upon the Grantee's death, retirement or other
termination of employment and the extent, if any, to which any such Award may be
exercised after such event. In interpreting any inconsistencies, gaps or
discrepancies between or among any documents, the Plan shall control over an
Agreement (unless there is an express specific exception in an Agreement to the
Plan), and an Agreement shall control over any letter or other notice or
document describing a grant of an Award.
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26.2 CONSENTS
If the Committee shall at any time determine that any Consent (as
hereafter defined) is necessary or desirable as a condition of, or in connection
with, the granting of any Award under the Plan, the issuance or purchase of
shares or other rights thereunder, or the taking of any other action thereunder
("Plan Action"), then such Plan Action shall not be taken, in whole or in part,
unless and until such Consent shall have been effected or obtained to the full
satisfaction of the Committee. "Consent" with respect to any Plan Action means
(a) any and all listings, registrations or qualifications in respect thereof
upon any securities exchange or under any federal, state or local law, rule or
regulation; (b) any and all written agreements and representations by the
Grantee with respect to the disposition of shares of Common Stock, or with
respect to any other matter, which the Committee shall deem necessary or
desirable to comply with the terms of any such listing, registration, or
qualification or to obtain an exemption from the requirement that any such
listing, qualification or registration be made; and (c) any and all other
consents, clearances and approvals in respect of a Plan Action.
26.3 NOTICE
Any notice required to be given to the Company hereunder shall be in
writing and shall be addressed to Corporate Secretary, Lark Technologies, Inc.,
9441 W. Sam Houston Parkway South, Suite 103, Houston, Texas 77099, or at such
other address the Company may hereafter designate to the Grantee. Any notice to
be given to the Grantee hereunder shall be addressed to the Grantee at the
address set forth beneath his/her signature hereto, or at such other address as
the Grantee may hereafter designate to the Company by notice as provided herein.
A notice shall be deemed to have been duly given when personally delivered or
mailed by registered mail or certified mail to the party entitled to receive it.
26.4 NOTICE OF SECTION 83(b) ELECTION AND DISQUALIFYING DISPOSITION
If any Grantee shall, in connection with the acquisition of Common Stock
make the election permitted under Section 83(b) of the Code (i.e., an election
to include in gross income in the year of transfer the amounts specified in
Section 83(b)), such Grantee shall notify the Company within ten (10) days of
filing the notice of election with the Internal Revenue Service. Further,
Grantee must notify the Company of any disposition of any Common Stock issued
pursuant to the exercise of such Award under the circumstances described in
Section 421(b) of the Code (relating to certain disqualifying dispositions)
within 10 days of such disposition.
The Plan was duly adopted and approved by the Board on May 10, 2000, and
was duly adopted and approved by the Stockholders of the Company on _______,
2000.
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