EXHIBIT 99.1
2002 STOCK BONUS PLAN
1. Purposes of the Plan.
The purpose of this Stock Bonus Plan (the "Plan") is to assist FONAR
Corporation, a Delaware corporation (the "Corporation"), and its subsidiaries
(as hereinafter defined) in attracting and retaining the services of key
employees, non-employee directors, officers, advisors and consultants, and to
secure for the Corporation and its subsidiaries the benefits of the incentive
inherent in ownership of the Corporation's equity securities by parties who are
responsible for the continuing growth and success of th e Corporation and its
subsidiaries.
For the purposes of this plan, the term "subsidiary" and/or "subsidiaries" shall
mean any corporation of which the majority of the outstanding voting stock is
owned directly or indirectly by the Corporation.
2. Shares Subject to the Plan.
Subject to the provisions of Section 7 of the Plan, an aggregate of 2,000,000
shares of Common Stock, par value $.0001 per share, of the Corporation ("Common
Stock"), are available for the issuance under the Plan as compensation for
services to the Corporation ("Bonus Stock").
The shares to be issued as Bonus Stock under the Plan may be authorized but
unissued shares of Common Stock or issued shares of Common Stock which are held
in the treasury of the Corporation.
3. Term of the Plan.
Subject to the provisions of Section 8 and 10, the Plan shall commence effective
as of June 1, 2002, and Bonus Stock awarded under the Plan must be issued no
later than May 31, 2012.
4. Administration of the Plan.
The Plan shall be administered by a committee which shall consist of two or such
greater or lesser number of members, as determined by the Board of Directors
from time to time, who shall be appointed by the Board of Directors of the
Corporation (the "Committee") or, in the absence of such a Committee, by the
Board of Directors of the Corporation. Directors of the Corporation who are
either eligible to receive Bonus Stock, or to whom Bonus Stock has been granted,
may vote on any matters affecting the admin istration of the plan or the
granting of Bonus Stock under the Plan. Any action of the Committee may be taken
by a written instrument signed by a majority of the members of the Committee
then in office. Members of the Committee need not be members of the Board of
Directors.
Subject to the express provisions of the Plan, the Committee or the Board or
Directors, as the case may be, shall have the authority, in its discretion: (i)
to determine the parties to receive Bonus Stock, the times when they shall
receive such awards, the number of shares to be issued, and the time, terms and
conditions of the issuance of any such shares; (ii) to construe and interpret
the terms of the Plan; (iii) to establish, amend and rescind rules and
regulations for the administration of the Plan; a nd (iv) to make all other
determinations necessary or advisable for administering the Plan. The
determinations of the Committee or the Board of Directors, as the case may be,
on the matters referred to in this Section 4 shall be final and conclusive.
5. Eligibility and Selection.
The Committee or the Board of Directors, as the case may be, shall have sole and
absolute discretion to issue Bonus Stock under the Plan to reward employees,
non-employee directors, advisors and consultants for services rendered or to be
rendered to or for the benefit of the Corporation, or any of its subsidiaries
(the grant of Bonus Stock under this Plan shall be referred to as a "Bonus Stock
Award"). In determining the parties to whom Bonus Stock Awards shall be granted
under the Plan and the number of shares of Common Stock which may be granted to
such persons, the Committee or the Board of Directors, as the case may be, shall
consider the duties of the parties, their present and potential contributions to
the success of the Corporation, and such other factors as the Committee or the
Board of Directors deems relevant in furthering the purposes of the granting of
such Bonus Stock and the interests of the Corporation. A party may receive more
than one Bonus Stock Award under the Plan.
6. Bonus Stock Awards.
(a) The Committee or the Board of Directors, as the case may be, shall
determine for each party chosen to participate in the Plan ("Participant")
the number of shares of Common Stock to be covered by each Bonus Stock
Award and the installments, if any, in which the Bonus Stock will be
granted.
(b) The Committee or the Board of Directors shall determine the terms,
conditions and restrictions, if any, to which such Bonus Stock or its
issuance will be subject. Any restrictions imposed shall be evidenced by a
written agreement executed by the Participant. Such agreement shall also
include any terms and conditions required by applicable securities laws.
(c) The Corporation shall deliver to the Participant on the date specified, or
as soon thereafter as is practicable, the number of shares of Common Stock
specified in such Participant's Bonus Stock Award, subject to and in
accordance with the Bonus Stock Award.
(d) Bonus Stock Awards shall not be transferable other than by the last will
and testament of the holder of the Bonus Stock Award or the applicable laws
of descent and distribution. Bonus Stock Awards may not be assigned, sold,
transferred, pledged, hypothecated or disposed of in any way (whether by
operation of law or otherwise) except to the extent expressly provided for
in the Plan and shall not be subject to execution, attachment or similar
process.
7. Dilution and Other Adjustments.
In the event of any change in the outstanding Common Stock by reason of any
stock dividend or split, recapitalization, merger, consolidation,
reorganization, combination or exchange of shares of Common Stock, or other
similar corporate change, the Committee or the Board of Directors, as the case
may be, shall make such adjustments as it, in its absolute discretion, deems
equitable in the number and kind of shares of stock authorized by the Plan and,
with respect to shares of Common Stock covered by Bonus S tock Awards but not
yet issued, in the number and kind of shares of stock covered by Bonus Stock
Awards made under the Plan.
8. Termination and Amendment of the Plan.
Unless sooner terminated, as hereinafter provided, this Plan shall terminate at
11:59 p.m. on May 31, 2012, and no Bonus Stock shall be granted hereunder after
that date. The Board of Directors may terminate or amend this Plan at any time
without notice, or make such modifications of this Plan as it shall deem
advisable. No termination, amendment or modification of the Plan may adversely
affect the rights of any party to whom a Bonus Stock Award has been made without
such party's consent.
9. Indemnification.
In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee and the
Board of Directors shall be indemnified by the Corporation against the
reasonable expenses, including attorney's fees actually and necessarily incurred
in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan or any Bonus Stock Award granted thereunder, and against all amounts paid
by them in settlement thereof (provided that such settlement is approved by the
Corporation) or paid by them in satisfaction of a judgment in any such action,
suit or proceeding, except in relation to matters as to which it shall be
adjudicated in such action, suit or proceeding that such Committee member or
director, as the case may be, is liable for negligence or misconduct in the
performance of his dut ies; provided that within 10 days after institution of
any such action, suit, or proceeding a Committee member or director, as the case
may be, shall offer the Corporation in writing the opportunity, at its own
expense, to handle and defend the same.
10. Effectiveness of the Plan.
The Plan shall become effective on June 1, 2002.