Exhibit 10.36
NETWORK EVENT THEATER, INC.
1999 SPECIAL STOCK OPTION PLAN
TABLE OF CONTENTS
Page
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ARTICLE I PURPOSE.....................................................1
ARTICLE II DEFINITIONS.................................................1
ARTICLE III ADMINISTRATION..............................................5
ARTICLE IV SHARE AND OTHER LIMITATIONS.................................8
ARTICLE V ELIGIBILITY................................................10
ARTICLE VI STOCK OPTIONS..............................................11
ARTICLE VII NON-TRANSFERABILITY AND TERMINATION OF
EMPLOYMENT/CONSULTANCY.....................................13
ARTICLE VIII CHANGE IN CONTROL PROVISIONS...............................15
ARTICLE IX TERMINATION OR AMENDMENT OF PLAN...........................17
ARTICLE X UNFUNDED PLAN..............................................18
ARTICLE XI GENERAL PROVISIONS.........................................18
ARTICLE XII EFFECTIVE DATE OF PLAN.....................................21
ARTICLE XIII TERM OF PLAN...............................................21
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NETWORK EVENT THEATER, INC.
1999 SPECIAL STOCK OPTION PLAN
1. PURPOSES. The purposes of this Stock Option Plan are to attract and
retain the best qualified personnel for positions of substantial responsibility,
to provide additional incentive to the Employees and directors of the Company or
its Subsidiaries, if any (as defined in Section 2 below), as well as other
individuals and consultants who perform services for the Company or its
Subsidiaries, who contribute to the Company's success by their ability,
ingenuity and industry, and to enable such persons to participate in the
long-term success and growth of the Company by giving them an equity interest in
the Company.
The Options offered pursuant to this Plan are a matter of separate
inducement and are not in lieu of any salary or other compensation for the
services of any Employee or any other individual.
Options granted hereunder may be either "incentive stock options," as
defined in Section 422 of the Internal Revenue Code of 1986, as amended, or
"non-qualified stock options," at the discretion of the Board and as reflected
in the terms of the written instrument evidencing an Option, although the
Company makes no warranty as to the qualification of any Option as an Incentive
Stock Option.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cause" shall mean (i) an act or acts or personal
dishonesty of a Participant at the expense of the Company or any of its
Subsidiaries, (ii) a willful act of misconduct which is materially injurious to
the Company, monetarily or otherwise, including but not limited to engaging in
any conduct which constitutes a felony under federal, state or local laws (other
than traffic violations); (iii) violation of the management responsibilities by
the Participant which is demonstrably willful and deliberate on the
Participant's part and which is not remedied within a reasonable period of time
after receipt of written notice from the Company or a Subsidiary; or (iv) the
conviction of the Participant of a felony involving moral turpitude.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Common Stock" shall mean the Common Shares of the Company
(par value $.01 per share).
(e) "Company" shall mean Network Event Theater, Inc., a
Delaware corporation.
(f) "Committee" shall mean the Committee appointed by the
Board of Directors in accordance with Section 4(a) of the Plan, if one has been
appointed, or the Board if no Committee has been appointed.
(g) "Continuous Status as an Employee" shall mean the absence
of any interruption or termination of service as an Employee. Continuous Status
as an Employee shall not be considered interrupted in the case of sick leave,
military leave, or any other leave of absence approved by the Board; provided,
however, in the event an Employee's status shall change from that of a full-time
employee (defined as working, on average, 30 or more hours per week) to that of
a part-time employee or consultant, or if Employee shall take an approved leave
of absence from the Company for any reason, Employee's Continuous Status as an
Employee shall be deemed suspended during such period of time and the accrual of
Employee's vesting rights to any affected portion of the Option shall also be
suspended during such period. When and if Employee's status shall revert to that
of a full-time employee not on leave of absence, Employee shall be deemed again
to be in Continuous Status as an Employee and his/her vesting rights shall
continue to accrue from such reversion date. When and if it is determined or the
Company is notified that Employee's status will not revert to that of a
full-time employee not on leave of absence, Employee shall forfeit any unvested
portion of the Option and, for purposes of exercising any unexercised portion of
the Option, if any, the date on which the Company determined or is notified that
reversion shall not occur shall be considered the date upon which Employee's
Continuous Status as an Employee shall be deemed to have terminated.
(h) "Employee" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(i) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
(j) "Incentive Stock Option" shall mean a stock option
intended to qualify as an incentive stock option within the meaning of Section
422 of the Internal Revenue Code of 1986, as amended.
(k) "Non-qualified Stock Option" shall mean a stock option not
intended to qualify as an Incentive Stock Option.
(l) "Option" shall mean a stock option granted pursuant to the
Plan (whether an Incentive Stock Option or Non-qualified Stock Option).
(m) "Optioned Stock" shall mean the Common Stock subject to an
Option.
(n) "Optionee" shall mean an Employee or other person who
receives an Option.
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(o) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 425(e) of the Internal Revenue Code of
1986, as amended.
(p) "Participant" shall mean an individual designated by the
Committee to receive the grant of an Option.
(q) "Plan" shall mean this 1999 Stock Option Plan of the
Company.
(r) "Plan Year" shall mean each calendar year that is the
anniversary of the Effective Date (as defined below) of this Plan, with the
first such Plan Year commencing on the Effective Date of this Plan.
(s) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(t) "SEC" shall mean the Securities and Exchange Commission.
(u) "Share" shall mean a share of the Common Stock, as
adjusted in accordance with Section 11 of the Plan.
(v) "Subsidiary" shall mean a "subsidiary corporation",
whether now or hereafter existing, as defined in Section 425(f) of the Internal
Revenue Code of 1986, as amended.
3. STOCK.
(a) Maximum Number of Shares. Subject to the provisions of
Section 11 of the Plan, the maximum aggregate number of shares which may be
issued pursuant to Options granted hereunder shall be ____________ Shares. If an
Option should expire or become unexercisable for any reason without having been
exercised in full, the unissued Shares which were subject thereto shall, unless
the Plan shall have been terminated, become available for further grant under
the Plan. Similarly, Shares which have been issued, but which the Company
retains or which the Participant tenders to the Company in satisfaction of
income and payroll tax withholding obligations or in satisfaction of the
exercise price of any Option shall remain authorized and shall again be
available for the purposes of the Plan, provided, however, that any such
previously issued Shares shall not be the subject of any grant under this Plan
to any officer of the Company who, at the time of such grant, is subject to the
short-swing trading provisions of Section 16 of the Exchange Act.
(b) Plan Year Limitations. The maximum number of Shares with
respect to which Options may be granted in any Plan Year to any Optionee will be
_____________.
(c) Source of Shares. Shares which may be acquired under the
Plan may be either authorized but unissued Shares, Shares of issued stock held
in the Company's treasury, or both, at the discretion of the Company.
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(d) No Rights as Stockholder. A Participant under this Plan
shall have no rights as a stockholder with respect to any Shares subject to such
Option until such Shares have been issued.
4. ADMINISTRATION.
(a) Procedure. The Company's Board of Directors may appoint a
Committee to administer the Plan. The Committee shall consist of not less than
two (2) members of the Board of Directors who shall administer the Plan on
behalf of the Board of Directors, subject to such terms and conditions as the
Board of Directors may prescribe. The Committee shall be comprised of at least
two disinterested persons (the term "disinterested" having the meaning ascribed
to it by Rule 16b-3 of the Exchange Act). Any member of the Committee must
recuse him or herself from any vote or discussion of Options that have been or
may be granted to such member under the Plan. A majority of the Committee shall
constitute a quorum, and the act of a majority of the members of the Committee
shall be the act of the Committee. Once appointed, the Committee shall continue
to serve until otherwise directed by the Board of Directors. From time to time
the Board of Directors 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. If the
Board of Directors fails to appoint a Committee or if the Board of Directors so
chooses, then the Board of Directors shall assume the responsibilities of the
Committee.
(b) Powers of the Committee. Subject to the provisions of the
Plan, the Committee shall have the authority, in its discretion: (i) to grant
Incentive Stock Options, in accordance with Section 422 of the Code, or to grant
Non-qualified Stock Options; (ii) to determine, upon review of relevant
information and in accordance with Section 8(b) of the Plan, the fair market
value of the Common Stock; (iii) to determine the exercise price per share of
Options to be granted which exercise price shall be determined in accordance
with Section 8(a) of the Plan; (iv) to determine the vesting period for any
Options granted hereunder in accordance with Section 9(a) of the Plan; (v) to
determine the persons to whom, and the time or times at which, Options shall be
granted and the number of shares to be represented by each Option; (vi) to
interpret the Plan; (vii) to prescribe, amend and rescind rules and regulations
relating to the Plan; (viii) to determine the terms and provisions of each
Option granted (which need not be identical) and, with the consent of the holder
thereof, modify or amend each Option; (ix) to accelerate or defer (with the
consent of the Participant) the exercise date of any Participant; (x) to
authorize any person to execute on behalf of the Company any instrument required
to effectuate the grant of an Option previously granted by the Board; and (xi)
to make all other determinations deemed necessary or advisable for the
administration of the Plan. Any determination of the Committee under the Plan
may be made without notice of meeting of the Committee by a writing signed by a
majority of the Committee members.
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(c) Employment of Agents. The Committee may employ such legal
counsel, consultants and agents it may deem desirable for the administration of
the Plan and may rely upon any opinion received from any such counsel or
consultant and any computation received from any such consultant or agent. The
Board of Directors shall determine the budget for the Committee. Expenses
incurred by the Committee in the engagement of such counsel, consultant or agent
shall be paid by the Company to the extent they do not exceed the budget
established by the Board of Directors. No member or former member of the
Committee or the Board of Directors shall be liable for any action or
determination made in good faith with respect to the Plan or any Option.
(d) Effect of the Committee's Decision. All decisions,
determinations, and interpretations of the Committee shall be final and binding
on all Participants and any other holders of any Options granted under the Plan,
although the full Board of Directors may, in its discretion, overrule the
decisions of the Committee.
5. ELIGIBILITY; NON-DISCRETIONARY GRANTS.
(a) General. Incentive Stock Options may be granted only to
Employees. Non-qualified Stock Options may be granted to Employees as well as
non-Employee directors and consultants, as determined by the Committee. A
director of the Company or of a Subsidiary who is not also an officer or
Employee of the Company or of such Subsidiary will not be eligible to receive an
Incentive Stock Option. Any person who has been granted an Option may, if s/he
is otherwise eligible, be granted an additional Option or Options. The Plan
shall not offer upon any Participant any right with respect to continuation of
employment by the Company, nor shall it interfere in any way with his/her right
or the Company's right to terminate his/her employment at any time.
The Committee shall consider such factors as it deems
pertinent in selecting Participants and in determining the type and amount of
their respective Options, including without limitation (a) the financial
condition of the Company, (b) anticipated financial results for the current or
future years, including return on invested capital, (c) the contribution by the
Participant to the profitability and development of the Company through the
achievement of strategic objectives, and (d) other compensation provided to
Participants.
(b) Limitation on Incentive Stock Options. No Incentive Stock
Option may be granted to an employee if, as the result of such grant, the
aggregate fair market value (determined at the time each Option was granted) of
the Shares with respect to which such Incentive Stock Options are exercisable
for the first time by such Employee during any calendar year (under all such
plans of the Company and any Parent and Subsidiary) shall exceed One Hundred
Thousand Dollars ($100,000). Any Options granted in excess of that amount shall
be deemed Non-qualified Stock Options. In addition, if for any reason any
Options (or any portion of any Options) granted or labeled as Incentive Stock
Options do not qualify as Incentive Stock Options, such Options shall be deemed
to be Non-qualified Stock Options to the extent they do not qualify as Incentive
Stock Options.
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6. TERM OF THE PLAN. The Plan shall become effective on the date (the
"Effective Date") of its adoption by the Board of Directors. The Plan shall
continue in effect until the tenth anniversary of its Effective Date unless
sooner terminated under Section 14 of the Plan.
7. TERM OF THE OPTION. The term of each Option shall be ten (10) years
from the date of grant thereof or such shorter term as may be provided in the
instrument evidencing the Option.
8. EXERCISE PRICE AND CONSIDERATION.
(a) General. The per Share exercise price for the Shares to be
issued pursuant to the exercise of an Incentive Stock Option shall be such price
as is determined by the Board, but shall be no less than one hundred percent
(100%) of the fair market value per Share on the date of grant; provided,
however, in the case of an Incentive Stock Option granted to an Employee who,
immediately before the grant of such Incentive Stock Option, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the per Share exercise price
shall be no less than 110% of the fair market value per Share on the date of
grant, as the case may be, and the term of such Incentive Stock Option may not
exceed five (5) years. The per Share exercise price for the Shares to be issued
pursuant to the exercise of Non-qualified Stock Option shall be such price as is
determined by the Board, but shall be no less than eighty-five percent (85%) of
the fair market value per Share on the date of grant.
(b) Fair Market Value. The fair market value shall be
determined by the Committee in its discretion, which determination shall be
conclusive; provided, however, that where there is a public market for the
Common Stock, the fair market value per Share shall be the mean of the bid and
asked prices or, if applicable, the closing price of the Common Stock on the
date of grant, as reported by the National Association of Securities Dealers
Automated Quotation (NASDAQ) System (although if there are no bid or asked
prices on such date, or no closing price, the prices on the closest date
preceding the date of grant shall be used); in the event the Common Stock is
listed on a stock exchange, the fair market value per Share shall be the closing
price on such exchange on the date of grant of the Option, as reported in the
Wall Street Journal.
(c) Consideration. The consideration to be paid for the Shares
to be issued upon exercise of an Option or in payment of any withholding taxes
on any Option, including the method of payment, shall be determined by the
Committee and may consist entirely of (i) cash, check or promissory note; (ii)
other Shares of Common Stock owned by the Employee having a fair market value on
the date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised; (iii) an assignment by the Employee of the
net proceeds to be received from a registered broker upon the sale of the Shares
or the proceeds of a loan from such broker in such amount; (iv) any combination
of such methods of payment; or (v) such other consideration and method of
payment for the issuance of Shares to the extent permitted under
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Delaware Law and meeting the rules and regulations of the SEC concerning plans
satisfying the requirements of Section 16(b)(3) of the Exchange Act. The cash
proceeds of the sale of Shares subject to Options are to be added to the general
funds of the Company and used for its general corporate purposes as the Board of
Directors shall determine.
9. EXERCISE OF OPTION.
(a) Procedure or Exercise; Rights as a Stockholder. Any
Incentive Stock Option granted hereunder shall be exercisable at such times and
subject to such conditions as may be determined by the Committee, including
performance criteria with respect to the Company and/or the Optionee, and as
shall be perishable under the terms of the Plan, but in no event earlier than
one year after the date of the grant and not later than 10 years after the date
if the grant. Any Non-qualified Stock Option granted hereunder shall be
exercisable at such times and subject to such conditions as maybe determined by
the Committee, including performance criteria with respect to the Company and/or
the Optionee, and as shall be perishable under the terms of the Plan, but in no
event later than 10 years after the date of the grant.
(b) Fractional Shares. An Option may not be exercised for a
fraction of a Share.
(c) Notice of Exercise. An Option shall be deemed to be
exercised when written notice of such exercise has been given to the Company in
accordance with the terms of the instrument evidencing the Option by the person
entitled to exercise the Option and full payment for the Shares with respect to
which the Option is exercised has been received by the Company. Full payment
may, as authorized by the Board, consist of any consideration and method of
payment allowable under Section 8(c) of the Plan; it being understood that the
Company shall take such action as may be reasonably required to permit use of an
approved payment method. Until the issuance, which in no event will be delayed
more than thirty (30) days from the date of the exercise of the Option, (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company), no right to vote or receive dividends
or any other rights as a stockholder shall exist with respect to the Optioned
Stock, notwithstanding the exercise of the Option. No adjustment will be made
for a dividend or other right for which the record date is prior to the date the
stock certificate is issued, except as provided in the Plan.
(d) Effect of Exercise. Exercise of an Option in any manner
shall result in a decrease in the number of Shares which thereafter may be
available, both for purposes of the Plan and for sale under the Option, by the
number of Shares as to which the Option is exercised.
(e) Termination of Status as an Employee. If any Employee
ceases to serve as an Employee for a any reason, s/he may, but only within
ninety (90) days (or such other period of time as is determined by the
Committee, but not to exceed ninety (90) days in the case of Incentive Stock
Options, or ten (10) years in the case of Non-qualified Stock Options) after the
date s/he ceases to be an Employee of the Company, exercise his/her Option to
the extent that
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s/he was entitled to exercise it as of the date of such termination. To the
extent that s/he was not entitled to exercise the Option at the date of such
termination, of if s/he does not exercise such Option (which s/he was entitled
to exercise) within the time specified herein, the Option shall terminate.
(f) Disability. Notwithstanding the provisions of Section 9(e)
above, in the event an Employee is unable to continue his/her employment with
the Company as a result of his/her total and permanent disability (as defined in
Section 105(d)(4) of the Internal Revenue Code of 1986, as amended), s/he may,
but only within three (3) months (or such other period of time not exceeding
twelve (12) months as is determined by the Committee) from the date of
disability, exercise his/her Option to the extent s/he was entitled to exercise
it at the date of such disability. To the extent that s/he was not entitled to
exercise it at the date of such disability, or if s/he does not exercise such
Option (which s/he was entitled to exercise) within the time specified herein,
the Option shall terminate.
(g) Death of Optionee. Notwithstanding the provisions of
Section 9(e) of the Plan, in the event of the death of an Optionee who was at
the time of his/her death an Employee of the Company and who shall have been in
Continuous Status as an Employee since the date of grant of the Option, the
Option may be exercised at any time within twelve (12) months following the date
of death by the Optionee's estate or by a person who acquired the right to
exercise that would have accrued had the Optionee continued living one (1) month
after the date of death.
(h) Continuous Status as Employee. Except as set forth in
Sections 9(e-g) of the Plan, no Optionee may exercise an Incentive Stock Option
unless between the time of the grant of the Option and the time of exercise
thereof s/he has been in Continuous Status as an Employee.
10. NON-TRANSFERABILITY OF INCENTIVES. An Option may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of descent or distribution and may be exercised,
during the lifetime of the Participant, only by the Participant.
11. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. Subject to
any required action by the stockholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan but as to
which no Options have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option, as well as the price per share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split or the payment of a stock dividend with
respect to the Common Stock or any other increase or decrease in the number of
issued shares of Common Stock effected without receipt of consideration by the
Company; provided, however, that conversion of any convertible securities of the
Company shall not be deemed to have been
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"effected without receipt of consideration." Such adjustment shall be made by
the Committee, whose determination in that respect 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 of Common Stock subject to an Option.
In the event of the proposed dissolution or liquidation of the Company,
or in the event of a proposed sale of all or substantially all of the assets of
the Company, or the merger of the Company with or into another corporation, the
Board of Directors of the Company shall, as to outstanding Options, either (i)
make appropriate provision for the protection of any such outstanding Options by
the substitution on an equitable basis of appropriate stock of the Company or of
the merged, consolidated or otherwise reorganized corporation which will be
issuable in respect to one share of Common Stock of the Company; or (ii) upon
written notice to an Optionee, provide that all unexercised Options must be
exercised within a specified number of days of the date of such notice or they
will be terminated. In any such case, the Board of Directors may, in its
discretion, advance the lapse of any waiting or installment periods and exercise
dates.
12. TIME FOR GRANTING OPTIONS. The date of grant of an Option shall,
for all purposes, be the later of (a) the date on which the Committee makes the
determination granting such Option, (b) the date upon which the Optionee begins
employment or working for the Company, (c) the date upon which the management of
the Company shall offer such Option to the Optionee, or (d) the Effective Date
of this Plan. Notice of the determination shall be given to each person to whom
an Incentive is so granted within a reasonable time after the date of such
grant.
13. INTENTIONALLY OMITTED.
14. AMENDMENT AND TERMINATION OF THE PLAN.
(a) Board Action. The Board may amend or terminate the Plan
from time to time in such respects as the Board may deem advisable; provided,
however, that the following revisions or amendments shall require approval of
the holders of a majority of the outstanding shares of the Company entitled to
vote:
(i) any change in the designation of the class of
persons eligible to be granted options; or
(ii) any material increase in the benefits accruing
to participants under the Plan.
(b) Solicitation of Stockholder Approval. If any amendment
requiring stockholder approval under Section 14(a) of the Plan is made, such
stockholder approval shall be solicited.
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(c) Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options already granted and such
Options shall remain in full force and effect as if this Plan had not been
mended or terminated, unless mutually agreed otherwise between the Optionee and
the Board, which agreement must be in writing and signed by the Optionee and the
Company.
15. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be issued
pursuant to the exercise of an Option unless the exercise of such Option and the
issuance and delivery of such Shares pursuant thereto shall comply with all
relevant provisions of law, including, without limitation, the Securities Act,
the Exchange Act, the rules and regulations promulgated thereunder, and the
requirements of any stock exchange upon which the Shares may then be listed, and
shall be further subject to the approval of counsel for the Company with respect
to such compliance.
As a condition to the exercise of an Option, the Company may require
the person exercising such Option to represent and warrant at the time of any
such exercise that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares and that such
person will not transfer or otherwise dispose of any Shares acquired by exercise
of the Option unless the transfer or disposition of such shares is covered by a
registration statement under the Securities Act of 1933, as amended, or an
exemption therefrom, if in the opinion of counsel for the Company, such a
representation is required by, or appropriate under, any of the aforementioned
relevant provisions of law.
16. RESERVATION OF SHARES. The Company, during the term of this Plan,
will at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
Inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
17. OPTION AGREEMENT. Options shall be evidenced by written agreements
in such form as the Committee shall approve.
18. INTENTIONALLY OMITTED.
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19. OTHER PROVISIONS. The Option agreements authorized under the Plan
shall contain such other provisions, including, without limitations,
restrictions upon the exercise of the Option, as the Board of Directors of the
Company shall deem advisable. Any Option agreement shall contain such
limitations and restrictions upon the exercise of the Incentive Stock Option as
shall be necessary in order that such option will be an incentive Stock Option
as defined in Section 422A of the Internal Revenue Code of 1986, as amended.
20. INDEMNIFICATION OF BOARD. In addition to such other rights of
indemnification as they may have as directors or as members of the Board, the
members of the Board shall be indemnified by the Company against the reasonable
expenses, including attorneys' 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 without the Plan or
any Option granted thereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding that such Board member is liable for
negligence or misconduct in the performance of his/her duties, provided that
within sixty (60) days after institution of any such action, suit or proceeding
a Board member shall, in writing, offer the Company the opportunity, at its own
expense, to handle and defend the same.
21. WITHHOLDING TAX. Each Participant shall, no later than the date as
of which the value of a Option first becomes includible in the Participant's
gross income for applicable tax purposes, pay to the Company, or make
arrangements satisfactory to the Committee regarding payment of, any federal,
state, local or other taxes of any kind required by law to be withheld with
respect to the Option (or portion thereof). The obligations of the Company under
the Plan shall be conditional on such payment or arrangements, and the Company
shall, to the extent permitted by law, have the right to deduct any such taxes
from any payment of any kind otherwise due to the Participant. Alternatively, in
the sole discretion of the Company, to the extent permitted by applicable laws
including regulations promulgated under the Exchange Act, such federal, state or
local income, the payroll tax withholding liability may be satisfied prior to
the delivery of any certificate or certificates for the shares by an adjustment,
equal in value to such liability, in the number of shares to be transferred to
the Participant. Whenever under the Plan payments are to be made in cash, such
payments shall be net of an amount sufficient to satisfy any federal, state or
local income and payroll tax withholding liability.
22. OTHER COMPENSATION PLANS. The adoption of the Plan shall not affect
any other stock option or incentive or other compensation plans in effect for
the Company or any Subsidiary, nor shall the Plan preclude the Company from
establishing any other forms of incentive or other compensation for employees
and directors of the Company or any Subsidiary.
23. COMPLIANCE WITH EXCHANGE ACT RULE 16b-3. With respect to persons
subject to Section 16 of the Exchange Act, transactions under the Plan are
intended to
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comply with all applicable conditions of Rule 16b-3 or its successors under the
Exchange Act. To the extent any provision of the Plan or action by the Board
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Board.
24. SINGULAR, PLURAL, GENDER. Whenever used herein, nouns in the
singular shall include the plural, and the masculine pronoun shall include the
feminine gender.
25. HEADINGS, ETC., NO PART OF PLAN. Headings of Articles and Sections
hereof are inserted for convenience and reference; they constitute no part of
the Plan.
26. GOVERNING LAW. The Plan, such Options as may be granted thereunder
and all related matters shall be governed by, and construed in accordance with,
the laws of the State of Delaware from time to time in effect.
27. PARTIAL INVALIDITY. The invalidity or illegality of any provision
herein shall not be deemed to affect the validity of any other provision.
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