1
Exhibit 10.2
NEUROCRINE BIOSCIENCES, INC.
AMENDED 1992 INCENTIVE STOCK PLAN
1. Purpose of the Plan. The purposes of this Incentive Stock Plan are to
attract and retain the best available personnel, to provide additional
incentive to the employees of Neurocrine Biosciences, Inc. (the "Company")
and to promote the success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement. The Board also has the discretion to
grant Stock Purchase Rights.
2. Definitions.
a. "Board" shall mean the Committee, if one has been appointed, or the
Board of Directors of the Company, if no Committee is appointed.
b. "Code" shall mean the Internal Revenue Code of 1986, as amended.
c. "Committee" shall mean the Committee appointed by the Board of
Directors in accordance with Section 4(a) of the Plan, if one is
appointed.
d. "Common Stock" shall mean the Common Stock of the Company.
e. "Company" shall mean Neurocrine Biosciences, Inc.
f. "Consultant" shall mean any person who is engaged by the Company or
any Parent or Subsidiary to render consulting services and is
compensated for such consulting services, and any director of the
Company whether compensated for such services or not.
g. "Continuous Status as an Employee or Consultant" shall mean the
absence of any interruption or termination of service as an Employee
or Consultant, as applicable. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of sick
leave, military leave, or any other leave of absence approved by the
Board; provided that such leave is for a period of not more than 90
days or reemployment upon the expiration of such leave is guaranteed
by contract or statute.
h. "Employee" shall mean any persons, 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. "Incentive Stock Option" shall mean an Option intended to qualify as
an incentive stock option within the meaning of Section 422 of the
Code.
j. "Nonstatutory Stock Option" shall mean an Option not intended to
qualify as an Incentive Stock Option.
k. "Option" shall mean a stock option granted pursuant to the Plan.
l. "Optioned Stock" shall mean the Common Stock subject to an Option or
Stock Purchase Right.
2
m. "Optionee" shall mean an Employee or Consultant who receives an
Option.
n. "Parent" shall mean a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
o. "Plan" shall mean this 1992 Incentive Stock Plan.
p. "Purchaser" shall mean an Employee or Consultant who exercises a
Stock Purchase Right.
q. "Share" shall mean a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
r. "Stock Purchase Right" shall mean a right to purchase Common Stock
pursuant to the Plan or the right to receive a bonus of Common Stock
for past services.
s. "Subsidiary" shall mean a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of the
Plan, the maximum aggregate number of shares under the Plan is 4,100,000
shares of Common Stock. The Shares may be authorized but unissued, or
reacquired Common Stock.
If an Option or Stock Purchase Right should expire or become unexercisable
for any reason without having been exercised in full, then the unpurchased
Shares which were subject thereto shall, unless the Plan shall have been
terminated, become available for future grant or sale under the Plan.
Notwithstanding any other provision of the Plan, shares issued under the Plan
and later repurchased by the Company shall not become available for future grant
or sale under the Plan.
4. Administration of the Plan.
a. Procedure.
i. Multiple Administrative Bodies. The Plan may be administered
by different Committees with respect to different groups of
Employees and Consultants.
ii. Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted
hereunder as "performance-based compensation" within the
meaning of Section 162(m) of the Code, the Plan shall be
administered by a Committee of two or more "outside directors"
within the meaning of Section 162(m) of the Code.
iii. Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions
contemplated hereunder shall be structured to satisfy the
requirements for exemption under Rule 16b-3.
iv. Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee,
which committee shall be constituted to satisfy applicable
laws.
b. Powers of the Board. Subject to the provisions of the Plan, the
Board shall have the authority, in its discretion: (i) to grant
Incentive Stock Options, Nonstatutory Stock Options or Stock
Purchase Rights; (ii) to determine, upon review of relevant
information and in accordance with
3
Section 7 of the Plan, the fair market value of the Common Stock;
(iii) to determine the exercise price per share of Options or Stock
Purchase Rights, to be granted, which exercise price shall be
determined in accordance with Section 7 of the Plan; (iv) to
determine the Employees or Consultants to whom, and the time or
times at which, Options or Stock Purchase Rights shall be granted
and the number of shares to be represented by each Option or Stock
Purchase Right; (v) to interpret the Plan; (vi) to prescribe, amend
and rescind rules and regulations relating to the Plan; (vii) to
determine the terms and provisions of each Option and Stock Purchase
Right granted (which need not be identical) and, with the consent of
the holder thereof, modify or amend any provisions (including
provisions relating to exercise price) of any Option or Stock
Purchase Right; (viii) to accelerate or defer (with the consent of
the Optionee) the exercise date of any Option, consistent with the
provisions of Section 5 of the Plan; (ix) to authorize any person to
execute on behalf of the Company any instrument required to
effectuate the grant of an Option or Stock Purchase Right previously
granted by the Board; (x) to allow Optionees to satisfy withholding
tax obligations by electing to have the Company withhold from the
Shares to be issued upon exercise of an Option or Stock Purchase
Right that number of Shares having a Fair Market Value equal to the
amount required to be withheld. 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. All elections by an Optionee
to have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may deem necessary or
advisable; and (xi) to make all other determinations deemed
necessary or advisable for the administration of the Plan.
c. Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all
Optionees, Purchasers and any other holders of any Options or Stock
Purchase Rights granted under the Plan.
5. Eligibility.
a. Options and Stock Purchase Rights may be granted to Employees and
Consultants, provided that Incentive Stock Options may only be
granted to Employees. An Employee or Consultant who has been granted
an Option or Stock Purchase Right may, if such Employee or
Consultant is otherwise eligible, be granted additional Option(s) or
Stock Purchase Right(s).
b. Each Option shall be designated in the written option agreement as
either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the
aggregate fair market value of the Shares with respect to which
Options designated as Incentive Stock Options are exercisable for
the first time by any Optionee during any calendar year (under all
plans of the Company) exceeds $100,000, such Options shall be
treated as Nonstatutory Stock Options.
c. For purposes of Section 5(b), Options shall be taken into account in
the order in which they were granted, and the fair market value of
the Shares shall be determined as of the time the Option with
respect to such Shares is granted.
d. The Plan shall not confer upon any Optionee or holder of a Stock
Purchase Right any right with respect to continuation of employment
by or the rendition of consulting services to the Company, nor shall
it interfere in any way with his or her right or the Company's right
to terminate his or her employment or services at any time, with or
without cause.
e. The following limitations shall apply to grants of Options to
Employees:
4
i. No Employee shall be granted, in any fiscal year of the
Company, Options to purchase more than 250,000 Shares.
ii. In connection with his or her initial employment, an Employee
may be granted Options to purchase up to an additional 250,000
Shares which shall not count against the limit set forth in
subsection (i) above.
iii. The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company's capitalization as
described in Section 11.
iv. If an Option is canceled in the same fiscal year of the
Company in which it was granted (other than in connection with
a transaction described in Section 12), the canceled Option
shall be counted against the limit set forth in subsection (i)
above. For this purpose, if the exercise price of an Option is
reduced, such reduction will be treated as a cancellation of
the Option and the grant of a new Option.
6. Term of Plan. The Plan shall become effective upon the earlier to occur of
its adoption by the Board of Directors or its approval by vote of holders
of a majority of the outstanding shares of the Company entitled to vote on
the adoption of the Plan. It shall continue in effect for a term of ten
(10) years unless sooner terminated under Section 13 of the Plan.
7. Exercise Price and Consideration.
a. The per Share exercise price for the Shares to be issued pursuant to
exercise of an Option or Stock Purchase Right shall be such price as
is determined by the Board, but shall be subject to the following:
i. In the case of an Incentive Stock Option;
(1) granted to an Employee who, at the time of 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.
(2) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the
fair market value per Share on the date of grant.
ii. In the case of a Nonstatutory Stock Option or a Stock Purchase
Right, the per Share exercise price shall be no less than 85%
of the fair market value per Share on the date of grant. In
the case of a Nonstatutory Stock Option intended to qualify as
"performance-based compensation" within the meaning of Section
162(m) of the Code, the per Share exercise price shall be no
less than 100% of the Fair Market Value per Share on the date
of grant.
iii. Notwithstanding the foregoing, Options may be granted with a
per Share exercise price of less than 100% of the Fair Market
Value per Share on the date of grant pursuant to a merger or
other corporate transaction.
For purposes of this Section 7(a), in the event that an Option or
Stock Purchase Right is amended to reduce the exercise price, the date of grant
of such Option or Stock Purchase Right shall thereafter be considered to be the
date of such amendment.
5
b. The fair market value shall be determined by the Board in its
discretion; 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 the closing price per share if
the Common Stock is listed on the National Association of Securities
Dealers Automated Quotation ("NASDAQ") National Market System) of
the Common Stock for the date of grant, as reported in the Wall
Street Journal (or, if not so reported, as otherwise reported by the
NASDAQ System) or, 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 or Stock
Purchase Right, as reported in the Wall Street Journal.
c. The consideration to be paid for the Shares to be issued upon
exercise of an Option or Stock Purchase Right, including the method
of payment, shall be determined by the Board (and in the case of an
Incentive Stock Option, shall be determined at the time of grant)
and may consist entirely of cash, check, promissory note, other
Shares of Common Stock which (i) either have been owned by the
Optionee for more than six (6) months on the date of surrender or
were not acquired directly or indirectly, from the Company, and (ii)
have 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, or any combination of such methods of payment, or such
other consideration and method of payment for the issuance of Shares
to the extent permitted under Sections 408 and 409 of the California
General Corporation Law. In making its determination as to the type
of consideration to accept, the Board shall consider if acceptance
of such consideration may be reasonably expected to benefit the
Company (Section 315(b) of the California General Corporation Law).
8. Options.
a. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no
more than ten (10) years from the date of grant thereof. In the case
of an Incentive Stock Option granted to an Optionee who, at the time
the Option is granted, 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 term of the Option shall be five (5)
years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement.
b. Exercise of Option.
i. Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under
such conditions as determined by the Board, including
performance criteria with respect to the Company and/or the
Optionee, and as shall be permissible under the terms of the
Plan, but in no case at a rate of less than 20% per year over
five (5) years from the date the Option is granted.
An Option may not be exercised for a fraction of a Share.
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
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 7 of, the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Sock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
6
be issued) such stock certificate promptly upon exercise of the Option. In the
event that the exercise of a Nonstatutory Stock Option pursuant to Section 5(b),
the Company shall issue a separate stock certificate evidencing the Shares
treated as acquired upon exercise of an Incentive Stock Option and a separate
stock certificate evidencing the Shares treated as acquired upon exercise of a
Nonstatutory Stock Option and shall identify each such certificate accordingly
in its stock transfer records. 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 Section 11 of the Plan.
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.
ii. Termination of Status as an Employee or Consultant. In the
event of termination of an Optionee's Continuous Status as an
Employee or Consultant (as the case may be), such Optionee
may, but only within such period of time as is determined by
the Board, with such determination in the case of an Incentive
Stock Option not exceeding three (3) months and in the case of
Nonstatutory Stock Option not exceeding six (6) months after
the date of termination, with such determination in the case
of an Incentive Stock Option being made at the time of grant
of the Option, exercise the Option to the extent that such
Employee or Consultant was entitled to exercise it at the date
of such termination (but in no event later than the date of
expiration of the term of such Option as set forth in the
Option Agreement). To the extent that such Employee or
Consultant was not entitled to exercise the Option at the date
of such termination, or if such Employee or Consultant does
not exercise such Option (which such Employee or Consultant
was entitled to exercise) within the time specified herein,
the Option shall terminate.
iii. Disability of Optionee. Notwithstanding the provisions of
Section 8(b)(ii) above, in the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a
result of such Employee's or Consultant's total and permanent
disability (as defined in Section 22(e)(3) of the Code), such
Employee or Consultant may, but only within six (6) months (or
such other period of time not exceeding twelve (12) months as
in determined by the Board, with such determination in the
case of an Incentive Stock Option being made at the time of
gant of the Option) from the date of such termination (but in
no event later than the date of expiration of the term of such
Option as set forth in the Option Agreement), exercise the
Option to the extent such Employee or Consultant was entitled
to exercise it at the date of such termination. To the extent
that such Employee or Consultant was not entitled to exercise
the Option at the date of termination, or if such Employee or
Consultant does not exercise such Option (which such Employee
or Consultant was entitled to exercise) within the time
specified herein, the Option shall terminate.
iv. Death of Optionee. In the event of the death of an Optionee:
(1) during the term of the Option who is at the time of his
or her death an Employee or Consultant of the Company
and who shall have been in Continuous Status as an
Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time within
six (6) months (but in no event later than the date of
expiration of the term of such Option as set forth in
the Option Agreement), by the Optionee's estate or by a
person who acquired the right to exercise the Option by
bequest or inheritance, but only to the extent that the
right to exercise would have accrued had the Optionee
continued living and remained in Continuous Status as an
Employee or Consultant six (6)
7
months (or such other period of time as in determined by
the Board at the time of grant of the Option) after the
date of death; or
(2) within thirty (30) days (or such other period of time
not exceeding three (3) months as is determined by the
Board, with such determination in the case of an
Incentive Stock Option being made at the time of grant
of the Option) after the termination of Continuous
Status as an Employee or Consultant, the Option may be
exercised, at any time within six (6) months (or such
other period of time as is determined by the Board at
the time of grant of the Option) following the date of
death (but in no event later than the date of expiration
of the term of such Option as set forth in the Option
Agreement), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to
exercise that had accrued at the date of termination.
9. Stock Purchase Rights.
a. Rights to Purchase. After the Board of Directors determines that it
will offer an Employee or Consultant a Stock Purchase Right, it
shall deliver to the offeree a stock purchase agreement or stock
bonus agreement, as the case may be, setting forth the terms,
conditions and restrictions relating to the offer, including the
number of Shares which such person shall be entitled to purchase,
and the time within which such person must accept such offer, which
shall in no event exceed six (6) months from the date upon which the
Board of Directors or its Committee made the determination to grant
the Stock Purchase Right. The offer shall be accepted by execution
of a stock purchase agreement or stock bonus agreement in the from
determined by the Board of Directors.
b. Issuance of Shares. Forthwith after payment therefor, the Shares
purchased shall be duly issued; provided, however, that the Board
may require that the Purchaser make adequate provision for any
Federal and State withholding obligations of the Company as a
condition to the Purchaser purchasing such Shares.
c. Repurchase Option. Unless the Board determines otherwise, the stock
purchase agreement or stock bonus agreement shall grant the Company
a repurchase option exercisable upon the voluntary or involuntary
termination of the Purchaser's employment with the Company for any
reason (including death or disability). If the Board so determines,
the purchase price for shares repurchased may be paid by
cancellation of any indebtedness of the Purchaser to the Company.
The repurchase option shall lapse at such rate as the Board may
determine.
d. Other Provisions. The stock purchase agreement or stock bonus
agreement shall contain such other terms, provisions and conditions
not inconsistent with the Plan as may be determined by the Board of
Directors.
10. Non-Transferability of Options and Stock Purchase Rights. Unless
determined otherwise by the Administrator, an Option or Stock Purchase
Right 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 Optionee,
only by the Optionee. If the Administrator makes an Option or Stock
Purchase Right transferable, such Option or Stock Purchase Right shall
contain such additional terms and conditions as the Administrator deems
appropriate.
8
11. Adjustments upon Changes in Capitalization or Merger.
a. Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock
covered by each outstanding Option or Stock Purchase Right, and the
number of shares of Common Stock which have been authorized for
issuance under the Plan but as to which no Options or Stock Purchase
Rights have yet been granted or which have been returned to the Plan
upon cancellation or expiration of an Option or Stock Purchase
Right, as well as the price per share of Common Stock covered by
each such outstanding Option or Stock Purchase Right, shall be
proportionately adjusted for any increase or decrease in the number
of issued shares of Common Stock resulting from a stock split,
reverse stock split, stock dividend, combination or reclassification
of 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. The conversion of any convertible
securities of the Company shall not be deemed to have been "effected
without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final,
binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of shares of Common Stock subject to
an Option or Stock Purchase Right.
b. Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Company, the Administrator shall notify the
Optionee or Purchaser at least fifteen (15) days prior to such
proposed action. To the extent it has not been previously exercised,
the Option or Stock Purchase Right shall terminate immediately prior
to the consummation of such proposed action.
c. Merger or Asset Sale. In the event of a merger, sale of all or
substantially all of the assets of the Company, tender offer or
other transaction or series of related transactions resulting in a
change of ownership of more than 50% of the voting securities of the
Company ("Change in Control"), approved by the majority of the
members of the Board on the Board prior to the commencement of such
Change in Control, each outstanding Option shall be assumed or an
equivalent option or right substituted by the successor corporation
or a Parent or Subsidiary of the successor corporation; provided
however, in the event that within one year of the date of the
completion of the Change in Control, the successor corporation or a
Parent or Subsidiary of the successor corporation terminates the
employment of an Optionee without Cause (as defined below), such
Optionee shall fully vest in and have the right to exercise the
options assumed or substituted for the Option as to all of the
Optioned Stock, including Shares as to which it would not otherwise
be exercisable. In the event that the successor corporation refuses
to assume or substitute for the Option, the Optionee shall fully
vest in and have the right to exercise the Option as to all of the
Optioned Stock, including Shares as to which it would not otherwise
be exercisable. If an Option becomes fully vested and exercisable in
lieu of assumption or substitution in the event of a Change of
Control, the Administrator shall notify the Optionee in writing or
electronically that the Option shall be fully vested and exercisable
for a period of fifteen (15) days from the date of such notice, and
the Option shall terminate upon the expiration of such period. For
the purposes of this paragraph, the Option shall be considered
assumed if, following the Change of Control, the option confers the
right to purchase, for each Share of Optioned Stock subject to the
Option immediately prior to the Change in Control, the consideration
(whether stock, cash, or other securities or property) received in
the Change of Control by holders of Common Stock for each Share held
on the effective date of the transaction (and if holders were
offered a choice of consideration, the type of consideration chosen
by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the Change of
Control is not solely common stock of the successor corporation or
its Parent, the Administrator may, with the
9
consent of the successor corporation, provide for the consideration
to be received upon the exercise of the Option, for each Share of
Optioned Stock subject to the Option, to be solely common stock of
the successor corporation or its Parent equal in fair market value
to the per share consideration received by holders of Common Stock
in the Change of Control. For purposes of this paragraph,
termination shall be for "Cause" in the event of the occurrence of
any of the following: (a) any intentional action or intentional
failure to act by employee which was performed in bad faith and to
the material detriment of the successor corporation or its Parent or
Subsidiary; (b) employee willfully and habitually neglects the
duties of employment; or (c) employee is convicted of a felony crime
involving moral turpitude, provided that in the event that any of
the foregoing events is capable of being cured, the successor
corporation or its Parent or Subsidiary shall provide written notice
to the employee describing the nature of such event and the employee
shall thereafter have five (5) business days to cure such event.
In the event of a Change in Control which is not approved by the majority
of the members of the Board on the Board prior to the commencement of a Change
in Control, each Optionee shall fully vest in and have the right to exercise all
outstanding Options as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable.
12. Date of Granting Options. The date of grant of an Option or Stock Purchase
Right shall, for all purposes, be the date on which the Board makes the
determination granting such Option or stock Purchase Right. Notice of the
determination shall be given to each Employee or Consultant to whom an
Option or Stock Purchase Right is so granted within a reasonable time
after the date of such grant.
13. Amendment and Termination of the Plan.
a. Amendment and Termination. The Administrator may at any time amend,
alter, suspend or discontinue the Plan, but no amendment,
alteration, suspension or discontinuation shall be made which would
impair the rights of any Optionee under any grant theretofore made,
without his or her consent. In addition, to the extent necessary and
desirable to comply with Section 422 of the Code (or any other
Applicable Laws or regulation, the requirements of the NASD or an
established stock exchange), the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to such a degree
as required.
b. Effect of Amendment or Termination. Any such amendment or
termination of the Plan shall not affect Options or Stock Purchase
Rights already granted, and such Options and Stock Purchase Rights
shall remain in full force and effect as if this Plan had not been
amended or terminated, unless mutually agreed otherwise between the
Optionee and the Administrator, which agreement must be in writing
and signed by the Optionee and the Company.
14. Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to
the exercise of an Option or Stock Purchase Rights unless the exercise of
such Option or Stock Purchase Rights and the issuance and delivery of such
Shares pursuant thereto shall comply with all relevant provisions of law,
including, without limitation, the Securities Act of 1933, as amended, 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 or Stock Purchase Right, the
Company may require the person exercising such Option or Stock Purchase Right 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 if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law.
10
15. 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.
The 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.
16. Option, Stock Purchase and Stock Bonus Agreements. Options shall be
evidenced by written option agreements in such form as the Board shall
approve. Upon the exercise of Stock Purchase Rights, the Purchaser shall
sign a stock purchase agreement or stock bonus agreement in such form as
the Board shall approve.
17. Shareholder Approval. Continuance of the Plan shall be subject to approval
by the shareholders of the Company within twelve (12) months before or
after the date the Plan is adopted. Such shareholder approval shall be
obtained in the degree and manner required under Applicable Laws and the
rules of any stock exchange upon which the Common Stock is listed.
18. Information to Optionees and Purchasers. The Company shall provide to each
Optionee and Purchaser, during the period for which such Optionee or
Purchaser has one or more Options to Stock Purchase Rights outstanding, a
balance sheet and an income statement at least annually. The Company shall
not be required to provide such information to key employees whose duties
in connection with the Company assure there access to equivalent
information.