EXHIBIT 10.51
[ALLIANCE SEMICONDUCTOR LETTERHEAD]
1. PURPOSE
This 2002 Stock Option Plan ("Plan") is established as a compensatory plan to
attract, retain and provide equity incentives to selected persons to promote the
financial success of Alliance Semiconductor Corporation, a Delaware corporation,
("Company"). Capitalized terms not previously defined herein are defined in
Section 17 of this Plan.
2. TYPES OF OPTIONS AND SHARES.
Options granted under this Plan ("Options") may be either (a) incentive stock
options ("ISOs") within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended ("Revenue Code"), or (b) nonqualified stock options
("NQSOs"), as designated at the time of grant. The shares of stock that may be
purchased upon exercise of Options granted under this Plan ("Shares") are shares
of the common stock $.01 par value per share, of the Company.
3. NUMBER OF SHARES
The aggregate number of Shares that may be issued pursuant to Options granted
under this Plan is 13,000,000 Shares, subject to adjustment as provided in
Section 11 of this Plan. "Named Executive Officers" (as that term is defined in
Item 402(a)(3) of Regulation S-K promulgated under the Securities Exchange Act
of 1934, as amended ("Exchange Act")) shall each be eligible to receive an
aggregate of up to a maximum of 2,250,000 Shares at any time during the term of
this Plan pursuant to the grant of Options hereunder, not to exceed 1,125,000
Shares during any twelve (12) month period, subject to adjustment as provided in
this Plan. If any Option expires or is terminated without being exercised in
whole or in part, the unexercised or released Shares from such Options shall be
available for future grant and purchase under this Plan. At all times during the
term of this Plan, the Company shall reserve and keep available such number of
Shares as shall be required to satisfy the requirements of outstanding Options
under this Plan. At such time and for so long as the Company is a "publicly held
corporation" within the meaning of Section 162(m) of the Revenue Code, no
employee or prospective employee may be granted one or more Options within any
fiscal year of the Company under this Plan and any other option plan of the
Company to purchase more than four million Shares, subject to adjustment as
provided in Section 11 of this Plan. An Option that is cancelled shall continue
to be counted against the limit of Options that may be granted to any individual
under this Section 3.
4. ELIGIBILITY
Options may be granted to employees, officers, directors, consultants,
independent contractors and advisers (provided such consultants, contractors and
advisers render bona fide services not in connection with the offer and sale of
securities in a capital-raising transaction) of the Company or any Parent,
Subsidiary or Affiliate of the Company. ISOs may be granted only to employees
(including officers and directors who are also employees) of the Company or a
Parent or Subsidiary of the Company. The Committee (as defined in Section 14) in
its sole discretion shall select the recipients of Options ("Optionees"). An
Optionee may be granted more than one Option under this Plan. The Company may
also, from time to time, substitute or assume outstanding options granted by
another company, whether in connection with an acquisition of such other company
or otherwise, by either (a) granting an Option under this Plan in replacement of
the option assumed by the Company, or (b) treating the assumed option as if it
had been granted under this Plan if the terms of such assumed option could be
applied to an Option granted under this Plan. Such substitution or assumption
shall be permissible if the holder of the substituted or assumed option would
have been eligible to be granted an Option hereunder if the other company had
applied the rules of this Plan to such grant.
5. TERMS AND CONDITIONS OF OPTIONS
The Committee shall determine whether each Option is to be an ISO or an NQSO,
the number of Shares subject to the Option, the exercise price of the Option,
the period during which the Option may be exercised, and all other terms and
conditions of the Option, subject to the following:
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5.1 Form of Option Grant
Each Option granted under this Plan shall be evidenced by a written
Stock Option Grant ("Grant") in such form (which need not be the same
for each Optionee) as the Committee shall from time to time approve,
which Grant shall comply with and be subject to the terms and
conditions of this Plan.
5.2 Date of Grant
The date of grant of an Option shall be the date on which the Committee
makes the determination to grant such Option unless otherwise specified
by the Committee. The Grant representing the Option will be delivered
to Optionee with a copy of this Plan within a reasonable time after the
granting of the Option.
5.3 Exercise Price
The exercise price of an Option shall be determined by the Committee
when the Option is granted and may be less than Fair Market Value (but
not less than the par value of the Shares) if permitted by the Exchange
Act; provided, however, that the exercise price of an ISO shall be not
less than 100% of the Fair Market Value of the Shares on the date the
Option is granted. The exercise price of any ISO granted to a person
owning more than 10% of the total combined voting power of all classes
of stock of the Company or any Parent or Subsidiary of the Company
("Ten Percent Stockholder") shall not be less than 110% of the Fair
Market Value of the Shares on the date the Option is granted.
5.4 Exercise Period
Options shall be exercisable within the times or upon the events
determined by the Committee as set forth in the Grant, provided,
however, that no Option shall be exercisable after the expiration of
ten (10) years from the date the Option is granted, and no ISO granted
to a ten percent (10%), or more, shareholder shall be exercisable after
the expiration of the five (5) years from the date the option is
granted.
5.5 Limitations on ISOs
The aggregate Fair Market Value (determined as of the time an Option is
granted) of stock with respect to which ISOs are exercisable for the
first time by an Optionee during any calendar year (under this Plan or
under any other incentive stock option plan of the Company or any
Affiliate, Parent or Subsidiary of the Company) shall not exceed
$100,000. If the Fair Market Value of Shares with respect to which ISOs
are exercisable for the first time by an Optionee during any calendar
year exceeds $100,000, the Options for the first $100,000 worth of
Shares to become exercisable in such year shall be ISOs and the Options
for the amount in excess of $100,000 that become exercisable in that
year shall be NQSOs. In the event that the Revenue Code or the
regulations promulgated thereunder are amended after the effective date
of this Plan to provide for a different limit on the Fair Market Value
of Shares permitted to be subject to ISOs, such different limit shall
be incorporated herein and shall apply to any Options granted after the
effective date of such amendment.
5.6 Options Non-Transferable
Options granted under this Plan and any interest therein, shall not be
transferable or assignable by Optionee, and may not be made subject to
execution, attachment or similar process, otherwise than by will or by
the laws of descent and distribution, and shall be exercisable during
the lifetime of Optionee only by Optionee; provided, however, that
NQSOs held by an Optionee who is not an officer or director of the
Company or other person (in each case, an "Insider") whose transactions
in the Company's common stock are subject to Section 16(b) of the
Exchange Act, may be transferred to such family members, trusts and
charitable institutions as the Committee, in its sole discretion, shall
approve at the time of the grant of such Option.
5.7 Assumed Options
In the event the Company assumes an option granted by another company,
the terms and conditions of such option shall remain unchanged (except
the exercise price and the number and nature of shares issuable upon
exercise, which will be adjusted appropriately pursuant to Section
424(c) of the Revenue Code). In the event the Company elects to grant a
new option rather than assuming an existing option (as specified in
Section 4), such new option need not be
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granted at Fair Market Value on the date of grant and may instead be
granted with a similarly adjusted exercise price.
6. EXERCISE OF OPTIONS
6.1 Notice
Options may be exercised only by delivery to the Company of a written
stock option exercise agreement ("Exercise Agreement") in a form
approved by the Committee (which need not be the same for each
Optionee), stating the number of Shares being purchased, the
restrictions imposed on the Shares, if any, and such representations
and agreements regarding Optionee's investment intent and access to
information, if any, as may be required by the Company to comply with
applicable securities laws, together with payment in full of the
exercise price for the number of Shares being purchased.
6.2 Payment
Payment for the Shares may be made in cash (by check) or, where
permitted by law:
6.2.1 by cancellation of indebtedness of the Company to the
Optionee;
6.2.2 where approved by the Committee in its sole discretion
at the time of grant, by surrender of shares of common stock
of the Company having a Fair Market Value equal to the
applicable exercise price of the Options, that have been owned
by Optionee for more than six (6) months (and which have been
paid for within the meaning of the Securities and Exchange
Commission ("SEC") Rule 144 and, if such Shares were purchased
from the Company by use of a promissory note, such note has
been fully paid with respect to such shares), or were obtained
by Optionee in the open public market; and are clear of all
liens, claims, encumbrances and security interests;
6.2.3 by waiver of compensation due or accrued to Optionee for
services rendered;
6.2.4 provided that a public market for the Company's stock
exists, through a "same day sale" commitment from Optionee and
a broker-dealer that is a member of the National Association
of Securities Dealers ("NASD Dealer") whereby Optionee
irrevocably elects to exercise the Option and to sell a
portion of the Shares so purchased to pay for the exercise
price and whereby the NASD Dealer irrevocably commits upon
receipt of such Shares to forward the exercise price directly
to the Company;
6.2.5 provided that a public market for the Company's stock
exists, through a "margin" commitment from Optionee and an
NASD Dealer whereby Optionee irrevocably elects to exercise
the Option and to pledge the Shares so purchased to the NASD
Dealer in a margin account as security for a loan from the
NASD Dealer in the amount of the exercise price, and whereby
the NASD Dealer irrevocably commits upon receipt of such
Shares to forward the exercise price directly to the Company;
or
6.2.6 by any combination of the foregoing.
6.3 Withholding Taxes
6.3.1 At the discretion of the Committee, Optionees may
satisfy withholding obligations as provided in this paragraph.
When an Optionee incurs tax liability in connection with an
Option which tax liability is subject to tax withholding under
applicable tax laws, the Optionee may satisfy the withholding
tax obligation by one or some combination of the following
methods:
6.3.1.1 by cash payment
6.3.1.2 out of Optionee's current compensation;
6.3.1.3 if permitted by the Committee, in its
discretion, by surrendering to the Company Shares
that in the case of Shares previously acquired from
the
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Company, have been owned by the Optionee for more
than six months on the date of surrender and have a
Fair Market Value on the date of surrender equal to
or less than Optionee's marginal tax rate times the
ordinary income recognized; or
6.3.1.4 by electing to have the Company withhold from
the Shares to be issued upon exercise of the Option
that number of Shares having a Fair Market Value
equal to the amount required to be withheld.
For this purpose, the Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of
tax to be withheld is to be determined ("Tax Date").
6.3.2 Any surrender by an Insider of previously owned Shares
to satisfy tax withholding obligations arising upon exercise
of this Option must comply with the applicable provisions of
Rule 16b-3 and shall be subject to such additional conditions
or restrictions as may be required thereunder to qualify for
the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
6.3.3 All elections by an Optionee to have Shares withheld to
satisfy tax withholding obligations shall be made in writing
in a form acceptable to the Committee and shall be subject to
the following restrictions:
6.3.3.1 the election must be made on or prior to the
applicable Tax Date; and
6.3.3.2 all elections shall be subject to the consent
or disapproval of the Committee.
6.3.4 In the event the election to have Shares withheld is
made by an Optionee and the Tax Date is deferred under Section
83 of the Code because no election is filed under Section
83(b) of the Code, the Optionee shall receive the full number
of Shares with respect to which the Option is exercised but
such Optionee shall be unconditionally obligated to tender
back to the Company the proper number of Shares on the Tax
Date.
6.4 Limitations on Exercise
Notwithstanding the exercise periods set forth in the Grant, exercise
of an Option shall always be subject to the following:
6.4.1 If Optionee ceases to be employed by the Company or any
Parent, Subsidiary or Affiliate of the Company for any reason
except death or disability, Optionee may exercise such
Optionee's Options to the extent (and only to the extent) that
they would have been exercisable upon the date of termination,
within three (3) months after the date of termination (or such
shorter time period as may be specified in the Grant).
6.4.2 If Optionee's employment with the Company or any Parent,
Subsidiary or Affiliate of the Company is terminated because
of the death of Optionee or disability of Optionee within the
meaning of Section 22(e)(3) of the Revenue Code, Optionee's
Options may be exercised to the extent (and only to the
extent) that they would have been exercisable by Optionee on
the date of termination by Optionee (or Optionee's legal
representative) within twelve (12) months after the date of
termination (or such shorter time period as may be specified
in the Grant), but in any event no later than the expiration
date of the Options.
6.4.3 If Optionee is an Insider, the Company is subject to
Section 16(b) of the Exchange Act, and Optionee ceases to be
employed by the Company for any reason, Optionee's Option will
remain exercisable, as to the extent (and only to the extent)
that it was exercisable on the date of termination, until the
later of (i) the last date such option would be exercisable
under Section 6.4.1 or 6.4.2, as applicable, or (ii) the end
of the thirty (30) day period commencing on the date six
months after the grant of such Option, with any extension
beyond three (3) months after termination of employment deemed
to be as an NQSO, and provided further that in no event may an
Option be exercisable later than the expiration date of the
Option.
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6.4.4 The Committee shall have discretion to determine whether
Optionee has ceased to be employed by the Company or any
Parent, Subsidiary, or Affiliate of the Company and the
effective date on which such employment terminated.
6.4.5 In the case of an Optionee who is a director,
independent consultant, contractor or adviser, the Committee
will have the discretion to determine whether Optionee is
"employed by the Company or any Parent, Subsidiary, or
Affiliate of the Company" pursuant to the foregoing Sections.
6.4.6 The Committee may specify a reasonable minimum number of
Shares that may be purchased on any exercise of an Option,
provided that such minimum number will not prevent Optionee
from exercising the full number of Shares as to which the
Option is then exercisable.
6.4.7 An Option shall not be exercisable unless such exercise
is in compliance with all applicable federal and state
securities laws, rules and regulations of any governmental
body and the requirements of any stock exchange or national
market system upon which the Shares may then be listed, as
they are in effect on the date of exercise. The Company shall
be under no obligation to register the Shares with the SEC or
to effect compliance with the registration, qualification or
listing requirements of any state securities laws, stock
exchange or national market system and the Company shall have
no liability for any inability or failure to do so.
7. RESTRICTIONS ON SHARES
At the discretion of the Committee, the Company may reserve to itself and/or its
assignee(s) in the Grant (a) a right of first refusal to purchase all Shares
that an Optionee (or a subsequent transferee) may propose to transfer to a third
party and/or (b) a right to repurchase a portion of or all Shares held by an
Optionee upon Optionee's termination of employment or service with the Company
or a Parent, Subsidiary or Affiliate of the Company, for any reason within a
specified time as determined by the Committee at the time of grant at (i)
Optionee's original purchase price, (ii) the Fair Market Value of such Shares or
(iii) a price determined by a formula or other provision set forth in the Grant.
8. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS
The Committee shall have the power to modify, extend or renew outstanding
Options and to authorize the grant of new Options in substitution therefor,
provided that any such action may not, without the written consent of Optionee,
impair any of the Optionee's rights under any Option previously granted. Any
outstanding ISO that is modified, extended, renewed or otherwise altered shall
be treated in accordance with Section 424(h) of the Revenue Code. The Committee
shall have the power to reduce the exercise price of outstanding Options without
the consent of Optionees by a written notice to the Optionees affected;
provided, however, that the exercise price per Share may not be reduced below
the minimum exercise price that would be permitted under Section 5.3 of this
Plan for Options granted on the date the action is taken to reduce the exercise
price; and provided further, that the Exercise Price shall not be reduced below
the par value of the Shares.
9. PRIVILEGES OF STOCK OWNERSHIP
No Optionee shall have any of the rights of a stockholder with respect to any
Shares subject to an Option until such Option is properly exercised. No
adjustment shall be made for dividends or distributions or other rights for
which the record date is prior to such date, except as provided in this Plan.
However, the Company shall provide to each Optionee, annually, during the period
for which such Optionee has one or more Options outstanding, financial
statements of the Company, consisting of, at minimum, a balance sheet and an
income statement. The Company shall not be required to provide such financial
statements to key employees whose duties in connection with the Company assure
them access to equivalent information.
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10. NO OBLIGATION TO EMPLOY
Nothing in this Plan or any Option granted under this Plan shall confer on any
Optionee any right to continue in the employ of, or other relationship with, the
Company or any Parent, Subsidiary or Affiliate of the Company or limit in any
way the right of the Company or any Parent, Subsidiary or Affiliate of the
Company to terminate Optionee's employment or other relationship at any time,
with or without cause.
11. ADJUSTMENT OF OPTION SHARES
In the event that the number of outstanding shares of common stock of the
Company is changed by a stock dividend, stock split, reverse stock split,
combination, reclassification or similar change in the capital structure of the
Company without consideration (or when consideration is less than the fair
market value), or if a substantial portion of the assets of the Company are
distributed, without consideration (or when consideration is less than the fair
market value) in a spin-off or similar transaction, to the stockholders of the
Company, the number of Shares available under this Plan, the number of Shares
subject to outstanding Options, the exercise price per Share of such Options and
the maximum number of Shares for which Options may be granted to Named Executive
Officers of the Company shall be proportionately adjusted, subject to any
required action by the Board of Directors ("Board") or stockholders of the
Company and compliance with applicable securities laws; provided, however, that
a fractional share shall not be issued upon exercise of any Option and any
fractions of a Share that would have resulted shall either be cashed out at Fair
Market Value or the number of Shares issuable under the Option shall be rounded
up to the nearest whole number, as determined by the Committee; and provided
further that the exercise price may not be decreased to below the par value, if
any, for the Shares.
12. ASSUMPTION OF OPTIONS BY SUCCESSORS
12.1 Assumption or Substitution
In the event of (a) a merger or consolidation in which the Company is
not the surviving corporation (other than a merger or consolidation
with a wholly owned subsidiary, a reincorporation, or other transaction
in which there is no substantial change in the stockholders of the
corporation and the Options granted under this Plan are assumed or
replaced by the successor corporation, which assumption shall be
binding on all Optionees), (b) a dissolution or liquidation of the
Company, (c) the sale of substantially all of the assets of the
Company, or (d) any other transaction which qualifies as a "corporate
transaction" under Section 424(a) of the Revenue Code wherein the
stockholders of the Company give up all of their equity interest in the
Company (except for the acquisition, sale or transfer of all or
substantially all of the outstanding shares of the Company), any or all
outstanding Options may be assumed or replaced by the successor
corporation, which assumption shall be binding on all Optionees. In the
alternative, the successor corporation may substitute an equivalent
option or provide substantially similar consideration to Optionees as
was provided to stockholders (after taking into account the existing
provisions of Optionee's options, such as the exercise price and the
vesting schedule). The successor corporation may also issue, in place
of outstanding shares of the Company held by Optionee as a result of
the exercise of an Option that is subject to repurchase, substantially
similar shares or other property subject to similar repurchase
restrictions no less favorable to Optionee.
12.2 Expiration
In the event such successor corporation, if any, refuses to assume or
substitute Options, as provided above, pursuant to a transaction
described in Section 12.1 above, or there is no successor corporation,
and if the Company is ceasing to exist as a separate corporate entity,
the Options shall, notwithstanding any contrary terms in the Grant,
expire on (and, in the case of a merger or consolidation under Section
12.1 (a) above, if the Company has reserved to itself a right to
repurchase Shares issued on exercise of Options at the original
purchase price of such Shares, such right shall terminate on), a date
at least 20 days after the Board gives written notice to Optionees
specifying the terms and conditions of such termination.
12.3 Additional Provisions
Subject to the foregoing provisions of this Section 12, in the event of
the occurrence of any transaction described in Section 12.1, any
outstanding Option shall be treated as provided in the applicable
agreement or plan of merger, consolidation, dissolution, liquidation,
sale of assets or other "corporate transaction".
13. ADOPTION AND STOCKHOLDER APPROVAL
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This Plan shall become effective on April 7, 2002. after its adoption by the
Board. This Plan shall be approved by the stockholders of the Company, in any
manner permitted by applicable corporate law, within twelve months before or
after the date this Plan is adopted by the Board. Upon the effective date of the
Plan, the Board may grant Options pursuant to this Plan; provided that, in the
event that stockholder approval is not obtained within the time period provided
herein, all Options granted hereunder shall terminate. No Option that is issued
as a result of any increase in the number of shares authorized to be issued
under this Plan shall be exercised prior to the time such increase has been
approved by the stockholders of the Company and all such Options granted
pursuant to such increase shall similarly terminate if such stockholder approval
is not obtained. After the Company becomes subject to Section 16(b) of the
Exchange Act and Section 162(m) of the Revenue Code, the Company will comply
with the requirements of Rule 16b-3 with respect to stockholder approval. All
non-expired and non-cancelled Options granted under the Company's 1992 Stock
Option plan (the "1992 Plan") shall be transferred to the Plan upon the
expiration of the 1992 Plan, on April 7, 2002.
14. ADMINISTRATION
This Plan may be administered by the Board or a committee appointed by the Board
("Committee"). As used in this Plan, references to the "Committee" shall mean
either the committee appointed by the Board to administer this Plan or the Board
if no committee has been established.
14.1 Composition of the Committee
The Committee shall be comprised of at least two members of the Board
of Directors, all of whom are Outside Directors and Disinterested
Persons. The Company will take appropriate steps to comply with the
disinterested administration requirements of Section 16(b) of the
Exchange Act, which shall consist of the appointment by the Board of a
Committee consisting of not less than two members of the Board, each of
whom is a Disinterested Person and with the requirements of Section
162(m) of the Revenue Code with respect to Option grants to the Named
Executive Officers of the Company.
14.2 Committee Authority
The Committee shall have the authority, without limitation, to:
14.2.1 construe and interpret the Plan, any Grant and any
other agreement or document executed pursuant to the Plan;
14.2.2 prescribe, amend and rescind rules and regulations
relating to the Plan;
14.2.3 select persons to receive Options;
14.2.4 determine the form and terms of Options;
14.2.5 determine the number of Shares subject to Options;
14.2.6 grant waivers of Plan or Option conditions;
14.2.7 determine the vesting and exercisability of Options:
14.2.8 correct any defect, supply any omission, or reconcile
any inconsistency in the Plan, any Grant or any other
agreement or document executed pursuant to the Plan;
14.2.9 make all other determinations necessary or advisable
for the administration of the Plan.
14.3 Committee Interpretation Binding
Any interpretation or determination made by the Committee with respect
to any of the provisions of this Plan or any Option granted under this
Plan shall be made in its sole discretion and shall be final and
binding upon the Company and all persons having an interest in any
Option or any Shares purchased pursuant to an Option.
15. TERM OR PLAN
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Options may be granted pursuant to this Plan from time to time within a period
of ten (10) years after the date on which this Plan is adopted by the Board.
16. AMENDMENT OR TERMINATION OF PLAN
The Committee may at any time terminate or amend this Plan in any respect
including (but not limited to) amendment of any form of grant, exercise
agreement or instrument to be executed pursuant to this Plan; provided, however,
that the Committee shall not, without the approval of the stockholders of the
Company, amend this Plan in any manner that requires such stockholder approval
pursuant to the Revenue Code or the regulations promulgated thereunder or
pursuant to the Exchange Act or Rule 16b-3 (or its successor) promulgated
thereunder.
17. CERTAIN DEFINITIONS
As used in this Plan, the following terms shall have the following meanings:
17.1 "Affiliate" means any corporation that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, another corporation, where "control"
(including the terms "controlled by" and "under common control with")
means the possession, direct or indirect, of the power to cause the
direction of the management and policies of the corporation, whether
through the ownership of voting securities, by contract or otherwise.
17.2 "Disinterested Person" shall have the meaning set forth in Rule
16b-(c)(2)(l) as promulgated by the SEC under Section 16(b) of the
Exchange Act, as such rule is amended from time to time and as
interpreted by the SEC.
17.3 "Fair Market Value" shall mean the fair market value of the Shares
as determined by the Committee from time to time in good faith. If a
public market exists for the Shares, the Fair Market Value shall be the
average of the last reported bid and asked prices for common stock of
the Company on the date of determination (or the average closing price
over the number of consecutive working days preceding the date of
determination as the Committee shall deem appropriate) or, in the event
the common stock of the Company is listed on a stock exchange or on the
NASDAQ National Market System, the Fair Market Value shall be the
closing price on such exchange or quotation system on the date of
determination (or the average closing price over the number of
consecutive working days preceding the date of determination as the
Committee shall deem appropriate).
17.4 "Outside Director" shall mean any director who is not (a) a
current employee of the Company or any Parent, Subsidiary or Affiliate
of the Company, (b) a former employee of the Company or any Parent,
Subsidiary or Affiliate of the Company who is receiving compensation
for prior services (other than benefits under a tax-qualified pension
plan), (c) a current or former officer of the Company or any Parent,
Subsidiary or Affiliate of the Company or (d) currently receiving
compensation for personal services in any capacity, other than as a
director, from the Company or any Parent, Subsidiary or Affiliate of
the Company; provided. however, that at such time as the term "Outside
Director", as used in Section 162(m) is defined in regulations
promulgated under Section 162(m) of the Revenue Code, "Outside
Director" shall have the meaning set forth in such regulations, as
amended from time to time and as interpreted by the Internal Revenue
Service.
17.5 "Parent" means any corporation (other than the Company) in an
unbroken chain of corporations ending with the Company if, at the time
of the granting of the Option, each of such corporations other than the
Company owns stock possessing 50% or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
17.6 "Subsidiary" means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if, at the
time of granting of the Option. each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50% or
more of the total combined voting power of all classes of stock in one
of the other corporations in such chain.
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