MICROVISION, INC.
1996 STOCK OPTION PLAN,
AS AMENDED
TABLE OF CONTENTS
Page
1. Purpose..............................................................1
2. Administration.......................................................1
2.1 Procedures
2.2 Powers
2.3 Limited Liability
2.4 Securities Exchange Act of 1934
3. Stock Subject to This Plan...........................................2
4. Eligibility..........................................................2
4.1 Optionees
4.2 Subsidiaries
5. Awards...............................................................3
5.1 Incentive Stock Options
5.2 Non-Qualified Stock Options
5.3 Vesting
5.4 Nontransferability
5.5 Termination of Options
(a) Generally
(b) For Cause; Resignation
(c) Retirement
(d) Disability
(e) Death
(f) Extension of Exercise Period Applicable to Termination
(g) Failure to Exercise Option
(h) Transfers; Leaves
6. Exercise.............................................................7
6.1 Procedure
6.2 Payment
6.3 Withholding
6.4 Conditions Precedent to Exercise
7. Foreign Qualified Grants.............................................8
8. Corporate Mergers, Acquisitions, Etc.................................8
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9. Holding Period.......................................................8
10. Option Agreements
11. Adjustments On Changes in Capitalization.............................8
11.1 Stock Splits, Capital Stock Adjustments
11.2 Effect of Merger, Sale of Assets, Liquidation or Dissolution
(a) Mergers, Sale of Assets, Other Transactions
(b) Liquidation; Dissolution
11.3 Fractional Shares
11.4 Determination of Board to Be Final
12. Securities Regulations...............................................9
13. Amendment and Termination...........................................10
13.1 Plan
13.2 Option
13.3 Automatic Termination
14. Miscellaneous.......................................................11
14.1 Time of Granting Options
14.2 No Status as Shareholder
14.3 Status as an Employee
14.4 Reservation of Shares
15. Effectiveness of This Plan..........................................12
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MICROVISION, INC.
1996 STOCK OPTION PLAN,
AS AMENDED
1. Purpose. The purpose of the 1996 Stock Option Plan (the "Plan") is to
provide a means by which Microvision, Inc. (the "Company"), may attract,
reward, and retain the services or advice of current or future employees,
officers, directors, and agents of the Company and to provide added
incentives to them by encouraging stock ownership in the Company.
2. Administration. This Plan shall be administered by the Board of
Directors of the Company (the "Board") or, if the Board shall authorize a
committee to administer this Plan, by such committee to the extent so
authorized; provided, however, that only the Board of Directors may
suspend, amend or terminate this Plan as provided in Section 13, and
provided further that a committee that includes officers of the Company
shall not be permitted to grant options to persons who are officers of the
Company. The administrator of this Plan is referred to as the "Plan
Administrator."
2.1 Procedures. The Board of Directors shall designate one member of
the Plan Administrator as chairman. The Plan Administrator may hold
meetings at such times and places as it shall determine. The acts of a
majority of the members of the Plan Administrator present at meetings at
which a quorum exists, or acts approved in writing by all Plan
Administrator members, shall constitute valid acts of the Plan
Administrator.
2.2 Powers Subject to the specific provisions of this Plan, the Plan
Administrator shall have the authority, in its discretion: (a) to grant the
stock options described in Section 5, including Incentive Stock Options and
Non-Qualified Stock Options, and to designate each option granted as an
Incentive Stock Option or a Non-Qualified Stock Option; (b) to determine,
in accordance with Section 5.1(f) of this Plan, the fair market value of
the shares of Common Stock subject to options; (c) to determine the
exercise price per share of options; (d) to determine the Optionees to
whom, and the time or times at which, options shall be granted and the
number of shares of Common Stock to be represented by each option; (e) to
interpret this Plan; (f) to prescribe, amend and rescind rules and
regulations relating to this Plan; (g) to determine the terms and
provisions of each option granted (which need not be identical) and, with
the consent of the Optionee, modify or amend each option; (h) to reduce the
exercise price per share of outstanding and unexercised options; (i) to
defer, with the consent of the Optionee, or to accelerate the exercise date
of any option; (j) to waive or modify any term or provision contained in
any option applicable to the underlying shares of Common Stock; (k) 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
Plan Administrator; and (l) to make all other determinations deemed
necessary or advisable for the administration of this Plan. The
interpretation and construction by the Plan Administrator
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of any terms or provisions of this Plan, any option issued hereunder or of
any rule or regulation promulgated in connection herewith and all actions
taken by the Plan Administrator shall be conclusive and binding on all
interested parties. The Plan Administrator may delegate administrative
functions to individuals who are officers or employees of the Company.
2.3 Limited Liability. No member of the Board of Directors or the Plan
Administrator or officer of the Company shall be liable for any action or
inaction of the entity or body, or another person or, except in
circumstances involving bad faith, of himself or herself. Subject only to
compliance with the explicit provisions hereof, the Board of Directors and
Plan Administrator may act in their absolute discretion in all matters
related to the Plan.
2.4 Securities Exchange Act of 1934. At any time that the Company has
a class of securities registered pursuant to Section 12 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), this Plan shall be
administered in accordance with Rule 16b-3 adopted under the Exchange Act
and Section 162(m) of the Internal Revenue Code of 1986, as amended, and
the regulations, proposed and final, thereunder, as all may be amended from
time to time, and each member of the Plan Administrator shall be a
"disinterested director" and an "outside director" with the meaning of such
Rule 16b-3 and Section 162(m), respectively.
3. Stock Subject to This Plan. Subject to adjustment as provided below and
in Section 11 hereof, the stock subject to this Plan shall be the Company's
common stock (the "Common Stock"), and the total number of shares of Common
Stock to be delivered on the exercise of all options granted under this
Plan shall not exceed 750,000 as such Common Stock was constituted on the
date on which this Plan was first amended by the Board as set forth on the
last page hereof. If any option granted under this Plan expires, is
surrendered, exchanged for another option, canceled or terminated for any
reason without having been exercised in full, the unpurchased shares
subject thereto shall again be available for purposes of this Plan,
including for replacement options that may be granted in exchange for such
surrendered, canceled or terminated options. Shares issued on exercise of
options granted under this Plan may be subject to restrictions on transfer,
repurchase rights or other restrictions as determined by the Plan
Administrator.
4. Eligibility.
4.1 Optionees. The Plan Administrator may award options to any current
or future employee, officer or agent of the Company or its subsidiaries.
Non-employee directors of the Company shall not be eligible to participate
in the Plan. Any party to whom an option is granted under this Plan is
referred to as an "Optionee."
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4.2 Subsidiaries. As used in this Plan, the term "subsidiary" of a
company shall include any corporation in which such company owns, directly
or indirectly, at the time of the grant of an option hereunder, stock
having 50% or more of the total combined voting power of all classes of
stock thereof.
5. Awards. The Plan Administrator, from time to time, may take the
following actions, separately or in combination, under this Plan: (a) grant
Incentive Stock Options, as defined in Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code"), to any employee of the Company or
its subsidiaries, as provided in Section 5.1 of this Plan; (b) grant
options other than Incentive Stock Options ("Non-Qualified Stock Options"),
as provided in Section 5.2 of this Plan; (c) grant options to officers,
employees and others in foreign jurisdictions, as provided in Section 7 of
this Plan; and (d) grant options in certain acquisition transactions, as
provided in Section 8 of this Plan. No employee may be granted options to
acquire more than 100,000 shares in any fiscal year of the Company.
5.1 Incentive Stock Options. Incentive Stock Options shall be subject
to the following terms and conditions:
(a) Incentive Stock Options may be granted under this Plan only
to employees of the Company or its subsidiaries, including employees who
are directors.
(b) No employee may be granted Incentive Stock Options under this
Plan to the extent that the aggregate fair market value, on the date of
grant, of the Common Stock with respect to which Incentive Stock Options
are exercisable for the first time by that employee during any calendar
year, under this Plan and under any other incentive stock option plan
(within the meaning of Section 422 of the Code) of the Company or any
subsidiary, exceeds $100,000. To the extent that any option designated as
an Incentive Stock Option exceeds the $100,000 limit, such option shall be
treated as a Non-Qualified Stock Option. In making this determination,
options shall be taken into account in the order in which they were
granted, and the fair market value of the shares of Common Stock shall be
determined as of the time that the option with respect to such shares was
granted.
(c) An Incentive Stock Option may be granted under this Plan to
an employee possessing more than 10% of the total combined voting power of
all classes of stock of the Company (as determined pursuant to the
attribution rules contained in Section 424(d) of the Code) only if the
exercise price is at least 110% of the fair market value of the Common
Stock subject to the option on the date the option is granted, as described
in Section 5.1(f) of this Plan, and only if the option by its terms is not
exercisable after the expiration of five years from the date it is granted.
(d) Except as provided in Section 5.5 of this Plan, no Incentive
Stock Option granted under this Plan may be exercised unless at the time of
such exercise the Optionee is employed by the Company or any subsidiary of
the Company and the Optionee has been so employed continuously since the
date such option was granted.
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(e) Subject to Sections 5.1.(c) and 5.1.(d) of this Plan,
Incentive Stock Options granted under this Plan shall continue in effect
for the period fixed by the Plan Administrator, except that no Incentive
Stock Option shall be exercisable after ten years from the date it is
granted.
(f) The exercise price shall not be less than 100% of the fair
market value of the shares of Common Stock covered by the Incentive Stock
Option at the date the option is granted. The fair market value of shares
shall be the closing price per share of the Common Stock on the date of
grant as reported on a securities quotation system or stock exchange. If
such shares are not so reported or listed, the Plan Administrator shall
determine the fair market value of the shares of Common Stock in its
discretion.
(g) The provisions of clauses (b) and (c) of this Section shall
not apply if either the applicable sections of the Code or the regulations
thereunder are amended so as to change or eliminate such limitations or to
permit appropriate modifications of those requirements by the Plan
Administrator.
5.2 Non-Qualified Stock Options. Non-Qualified Stock Options shall be
subject to the following terms and conditions:
(a) The exercise price may be more or less than or equal to the
fair market value of the shares of Common Stock covered by the
Non-Qualified Stock Option on the date the option is granted, and the
exercise price may fluctuate based on criteria determined by the Plan
Administrator. The fair market value of shares of Common Stock covered by a
Non-Qualified Stock Option shall be determined by the Plan Administrator,
as described in Section 5.1(f).
(b) Unless otherwise established by the Plan Administrator, any
Non-Qualified Stock Option shall terminate ten years after the date it is
granted.
5.3 Vesting. To ensure that the Company will achieve the purposes of
and receive the benefits contemplated in this Plan, any option granted to
any Optionee hereunder shall be exercisable according to the vesting
schedule, if any, established by the Plan Administrator and set forth in
the option grant letter issued to each Optionee.
5.4 Nontransferability. Options granted under this Plan and the rights
and privileges conferred hereby may not be transferred, assigned, pledged
or hypothecated in any manner (whether by operation of law or otherwise)
other than by will or by the applicable laws of descent and distribution,
shall not be subject to execution, attachment or similar process, and shall
be exercisable during the Optionee's lifetime only by the Optionee. Any
purported transfer or assignment in violation of this provision shall be
void.
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5.5 Termination of Options.
(a) Generally. Unless otherwise determined by the Plan
Administrator or specified in the Optionee's Option Agreement, if the
Optionee's employment or service with the Company terminates for any reason
other than for cause, resignation, retirement, disability or death, and
unless by its terms the option sooner terminates or expires, then the
Optionee may exercise, for a three-month period, that portion of the
Optionee's option that was exercisable at the time of such termination of
employment or service (provided the conditions of Section 6.4 and any other
conditions specified in the Option Agreement shall have been met by the
date of exercise of such option).
(b) For Cause; Resignation.
(i) If an Optionee is terminated for cause or resigns in
lieu of dismissal, any option granted hereunder shall be deemed to have
terminated as of the time of the first act that led or would have led to
the termination for cause or resignation in lieu of dismissal, and such
Optionee shall thereupon have no right to purchase any shares of Common
Stock pursuant to the exercise of such option, and any such exercise shall
be null and void. Termination for "cause" shall include (i) the violation
by the Optionee of any reasonable rule or policy of the Board of Directors
or the Optionee's superiors or the chief executive officer or the chief
operating officer of the Company that results in damage to the Company or
which, after notice to do so, the Optionee fails to correct within a
reasonable time; (ii) any willful misconduct or gross negligence by the
Optionee in the responsibilities assigned to him or her; (iii) any willful
failure to perform his or her job as required to meet the objectives of the
Company; (iv) any wrongful conduct of an Optionee that has an adverse
impact on the Company or that constitutes a misappropriation of the assets
of the Company; (v) unauthorized disclosure of confidential information; or
(vi) the Optionee's performing services for any other company or person
that competes with the Company while he or she is employed by or provides
services to the Company, without the written approval of the chief
executive officer of the Company. "Resignation in lieu of dismissal" shall
mean a resignation by an Optionee of employment with or service to the
Company if (i) the Company has given prior notice to such Optionee of its
intent to dismiss the Optionee for circumstances that constitute cause, or
(ii) within two months of the Optionee's resignation, the chief operating
officer or the chief executive officer of the Company or the Board of
Directors determines, which determination shall be final and binding, that
such resignation was related to an act that would have led to a termination
for cause.
(ii) If an Optionee resigns from the Company, the right of
the Optionee to exercise his or her option shall be suspended for a period
of two months from the date of resignation, unless the chief executive
officer of the Company or the Board of Directors determines otherwise in
writing. Thereafter, unless there is a determination that the Optionee
resigned in lieu of dismissal, the option may be exercised at any time
before the earlier of (i) the expiration date of the option (which shall
have been similarly suspended) or (ii) the expiration of three months after
the date of resignation, for that portion of the
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Optionee's option that was exercisable at the time of such resignation
(provided the conditions of Section 6.4 and any other conditions specified
in the Option Agreement shall have been met at the date of exercise of such
option).
(c) Retirement. Unless otherwise determined by the Plan
Administrator, if an Optionee's employment or service with the Company is
terminated with the Company's approval for reasons of age, the Option may
be exercised at any time before the earlier of (a) the expiration date of
the option or (b) the expiration of three months after the date of such
termination of employment or service, for that portion of the Optionee's
option that was exercisable at the time of such termination of employment
or service (provided the conditions of Section 6.4 and any other conditions
specified in the Option Agreement shall have been met at the date of
exercise of such option).
(d) Disability. Unless otherwise determined by the Plan
Administrator, if an Optionee's employment or relationship with the Company
terminates because of a permanent and total disability (as defined in
Section 22(e)(3) of the Code), the option may be exercised at any time
before the earlier of (a) the expiration date of the option or (b) the
expiration of 12 months after the date of such termination, for up to the
full number of shares of Common Stock covered thereby, including any
portion not yet vested (provided the conditions of Section 6.4 and any
other conditions specified in the Option Agreement shall have been met by
the date of exercise of such option).
(e) Death. Unless otherwise determined by the Plan Administrator,
in the event of the death of an Optionee while employed by or providing
service to the Company, the option may be exercised at any time before the
earlier of (a) the expiration date of the option or (b) the expiration of
12 months after the date of death by the person or persons to whom such
Optionee's rights under the option shall pass by the Optionee's will or by
the applicable laws of descent and distribution, for up to the full number
of shares of Common Stock covered thereby, including any portion not yet
vested (provided the conditions of Section 6.4 and any other conditions
specified in the Option Agreement shall have been met by the date of
exercise of such option).
(f) Extension of Exercise Period Applicable to Termination. The
Plan Administrator, at the time of grant or at any time thereafter, may
extend the one-month, three-month and 12-month exercise periods to any
length of time not longer than the original expiration date of the option,
and may increase the portion of an option that is exercisable, subject to
such terms and conditions as the Plan Administrator may determine;
provided, that any extension of the exercise period or other modification
of an Incentive Stock Option shall be subject to the written agreement and
acknowledgment by the Optionee that the extension or modification
disqualifies the option as an Incentive Stock Option.
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(g) Failure to Exercise Option. To the extent that the option of
any deceased Optionee or of any Optionee whose employment or service
terminates is not exercised within the applicable period, all rights to
purchase shares of Common Stock pursuant to such options shall cease and
terminate.
(h) Transfers; Leaves. For purposes of this Section 5.5, a
transfer of employment or other relationship between or among the Company
and/or any subsidiaries shall not be deemed to constitute a termination of
employment or other cessation of relationship with the Company or any of
its subsidiaries. For purposes of this Section 5.5, with respect to
Incentive Stock Options, employment shall be deemed to continue while the
Optionee is on military leave, sick leave or other bona fide leave of
absence (as determined by the Plan Administrator) in accordance with the
policies of the Company.
6. Exercise.
6.1 Procedure. Subject to the provisions of Section 5.3 above, each
option may be exercised in whole or in part; provided, however, that no
fewer than 100 shares (or the remaining shares then purchasable under the
option, if less than 100 shares) may be purchased on any exercise of any
option granted hereunder and that only whole shares will be issued pursuant
to the exercise of any option (the number of 100 shares shall not be
changed by any transaction or action described in Section 8 or Section 11
unless the Plan Administrator determines that such a change is
appropriate). Options shall be exercised by delivery to the Secretary of
the Company or his or her designated agent of notice of the number of
shares with respect to which the option is exercised, together with payment
in full of the exercise price and any applicable withholding taxes.
6.2 Payment. Payment of the option exercise price shall be made in
full when the notice of exercise of the option is delivered to the
Secretary of the Company or his or her designated agent and shall be in
cash or bank certified or cashier's check or through irrevocable
instructions to a stock broker to deliver the amount of sales proceeds
necessary to pay the appropriate exercise price and withholding tax
obligations, all in accordance with applicable governmental regulations,
for the shares of Common Stock being purchased. The Plan Administrator may
determine at the time the option is granted for Incentive Stock Options, or
at any time before exercise for Non-Qualified Stock Options, that
additional forms of payment will be permitted.
6.3 Withholding. Before the issuance of shares of Common Stock on the
exercise of an option, the Optionee shall pay to the Company the amount of
any applicable federal, state or local tax withholding obligations. The
Company may withhold any distribution in whole or in part until the Company
is so paid. The Company shall have the right to withhold such amount from
any other amounts due or to become due from the Company to the Optionee,
including salary (subject to applicable law) or to retain and withhold a
number of shares having a market value not less than the amount of such
taxes required to be withheld
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by the Company to reimburse it for any such taxes and cancel (in whole or
in part) any such shares so withheld.
6.4 Conditions Precedent to Exercise. The Plan Administrator may
establish conditions precedent to the exercise of any option, which shall
be described in the relevant Option Agreement.
7. Foreign Qualified Grants Options under this Plan may be granted to
officers and employees of the Company and other persons described in
Section 4 who reside in foreign jurisdictions as the Plan Administrator may
determine from time to time. The Board of Directors may adopt supplements
to the Plan as needed to comply with the applicable laws of such foreign
jurisdictions and to give Optionees favorable treatment under such laws;
provided, however, that no award shall be granted under any such supplement
on terms more beneficial to such Optionees than those permitted by this
Plan.
8. Corporate Mergers, Acquisitions, Etc. The Plan Administrator may also
grant options under this Plan having terms, conditions and provisions that
vary from those specified in this Plan provided that such options are
granted in substitution for, or in connection with the assumption of,
existing options granted, awarded or issued by another corporation and
assumed or otherwise agreed to be provided for by the Company pursuant to
or by reason of a transaction involving a corporate merger, consolidation,
acquisition of property or stock, reorganization or liquidation to which
the Company is a party.
9. Holding Period. Unless otherwise determined by the Plan Administrator,
if a person subject to Section 16 of the Exchange Act exercises an option
within six months of the date of grant of the option, the shares of Common
Stock acquired on exercise of the option may not be sold until six months
after the date of grant of the option.
10. Option Agreements. Options granted under this Plan shall be evidenced
by written stock option agreements (the "Option Agreements") that shall
contain such terms, conditions, limitations and restrictions as the Plan
Administrator shall deem advisable and that are consistent with this Plan.
All Option Agreements shall include or incorporate by reference the
applicable terms and conditions contained in this Plan.
11. Adjustments On Changes in Capitalization.
11.1 Stock Splits, Capital Stock Adjustments. The aggregate number and
class of shares for which options may be granted under this Plan, the
number and class of shares covered by each outstanding option and the
exercise price per share thereof (but not the total price), and each such
option, shall all be proportionately adjusted for any increase or decrease
in the number of issued shares of Common Stock of the Company resulting
from a stock split, stock dividend or consolidation of shares or any like
capital stock adjustment.
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11.2 Effect of Merger, Sale of Assets, Liquidation or Dissolution.
(a) Mergers, Sale of Assets, Other Transactions. In the event of
a merger, consolidation or plan of exchange to which the Company is a party
or a sale of all or substantially all of the Company's assets (each, a
"Transaction"), the Board of Directors, in its sole discretion and to the
extent possible under the structure of the Transaction, shall select one of
the following alternatives for treating outstanding options under this
Plan:
(i) Outstanding options shall remain in effect in accordance
with their terms;
(ii) Outstanding options shall be converted into options to
purchase stock in the corporation that is the surviving or acquiring
corporation in the Transaction. The amount, type of securities subject
thereto and exercise price of the converted options shall be determined by
the Board of Directors of the Company, taking into account the relative
values of the companies involved in the Transaction and the exchange rate,
if any, used in determining shares of the surviving corporation to be
issued to holders of shares of the Company. Unless otherwise determined by
the Board of Directors, the converted options shall be vested only to the
extent that the vesting requirements relating to options granted hereunder
have been satisfied;
(iii) The Board of Directors provides a period before the
consummation of the Transaction during which outstanding options shall be
exercisable to the extent vested and, on the expiration of such period, all
unexercised options shall immediately terminate. The Board of Directors, in
its sole discretion, may accelerate the vesting of such options so that
they are exercisable in full during such period; or
(iv) The Board of Directors shall take such other action
with respect to outstanding options as the Board deems to be in the best
interests of the Company.
(b) Liquidation; Dissolution. If the Company is liquidated or
dissolved, options shall be treated in accordance with Section
11.2(a)(iii).
11.3 Fractional Shares. If the number of shares covered by any option
is adjusted, any fractional shares resulting from such adjustment shall be
disregarded and each such option shall cover only the number of full shares
resulting from such adjustment.
11.4 Determination of Board to Be Final All adjustments under this
Section 11 shall be made by the Board of Directors, and its determination
as to what adjustments shall be made, and the extent thereof, shall be
final, binding and conclusive. Unless an Optionee agrees otherwise, any
change or adjustment to an Incentive Stock Option shall be made, if
possible, in such a manner so as not to constitute a "modification," as
defined in Section 424(h) of the Code, and so as not to cause the
Optionee's Incentive Stock Option to fail to continue to qualify as an
Incentive Stock Option.
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12. Securities Regulations.
Shares of Common Stock shall not be issued with respect to an
option granted under this Plan 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, any applicable
state securities laws, the Securities Act of 1933, as amended, the Exchange
Act, the rules and regulations promulgated thereunder, applicable laws of
foreign countries and other jurisdictions and the requirements of any
quotation service or stock exchange on 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, including the availability of an exemption
from registration for the issuance and sale of any shares hereunder. The
inability of the Company to obtain, from any regulatory body having
jurisdiction, the authority deemed by the Company's counsel to be necessary
for the lawful issuance and sale of any shares hereunder or the
unavailability of an exemption from registration for the issuance and sale
of any shares hereunder shall relieve the Company of any liability with
respect of the nonissuance or sale of such shares as to which such
requisite authority shall not have been obtained.
As a condition to the exercise of an option, the Company may
require the Optionee to represent and warrant at the time of any such
exercise that the shares of Common Stock 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 relevant provision of the aforementioned laws. The
Company may place a stop-transfer order against any shares of Common Stock
on the official stock books and records of the Company, and a legend may be
stamped on stock certificates to the effect that the shares of Common Stock
may not be pledged, sold or otherwise transferred unless an opinion of
counsel is provided (concurred in by counsel for the Company) stating that
such transfer is not in violation of any applicable law or regulation. The
Plan Administrator may also require such other action or agreement by the
Optionees as may from time to time be necessary to comply with the federal
and state securities laws. THIS PROVISION SHALL NOT OBLIGATE THE COMPANY TO
UNDERTAKE REGISTRATION OF THE OPTIONS OR STOCK THEREUNDER.
If any of the Company's capital stock of the same class as the
Common Stock subject to options granted hereunder is listed on a national
securities exchange, all shares of Common Stock issued hereunder if not
previously listed on such exchange shall be authorized by that exchange for
listing thereon before the issuance thereof.
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13. Amendment and Termination.
13.1 Plan. The Board of Directors may at any time suspend, amend or
terminate this Plan, provided that, except as set forth in Section 8, the
approval of the Company's shareholders is necessary within twelve months
before or after the adoption by the Board of Directors of any amendment
that will:
(a) increase the number of shares of Common Stock to be reserved
for the issuance of options under this Plan;
(b) permit the granting of stock options to a class of persons
other than those now permitted to receive stock options under this Plan; or
(c) require shareholder approval under applicable law, including
Section 16(b) of the Exchange Act.
13.2 Options. Subject to the requirements of Section 422 of the Code
with respect to Incentive Stock Options and to the terms and conditions and
within the limitations of this Plan, the Plan Administrator may modify or
amend outstanding options granted under this Plan. The modification or
amendment of an outstanding option shall not, without the consent of the
Optionee, impair or diminish any of his or her rights or any of the
obligations of the Company under such option. Except as otherwise provided
in this Plan, no outstanding option shall be terminated without the consent
of the Optionee. Unless the Optionee agrees otherwise, any changes or
adjustments made to outstanding Incentive Stock Options granted under this
Plan shall be made in such a manner so as not to constitute a
"modification," as defined in Section 425(h) of the Code, and so as not to
cause any Incentive Stock Option issued hereunder to fail to continue to
qualify as an Incentive Stock Option as defined in Section 422(b) of the
Code.
13.3 Automatic Termination. Unless sooner terminated by the Board of
Directors, this Plan shall terminate ten years from the date on which this
Plan is adopted by the Board. No option may be granted after such
termination or during any suspension of this Plan. The amendment or
termination of this Plan shall not, without the consent of the Optionee,
alter or impair any rights or obligations under any option theretofore
granted under this Plan.
14. Miscellaneous.
14.1 Time of Granting Options. The date of grant of an option shall,
for all purposes, be the date on which the Company completes the required
corporate action relating to the grant of an option; the execution of an
Option Agreement and the conditions to the exercise of an option shall not
defer the date of grant.
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14.2 No Status as Shareholder. Neither the Optionee nor any party to
which the Optionee's rights and privileges under the option may pass shall
be, or have any of the rights or privileges of, a shareholder of the
Company with respect to any of the shares of Common Stock issuable on the
exercise of any option granted under this Plan unless and until such option
has been exercised and the issuance (as evidenced by the appropriate entry
on the books of the Company or duly authorized transfer agent of the
Company) of the stock certificate evidencing such shares.
14.3 Status as an Employee. Nothing in this Plan or in any option
granted pursuant to this Plan shall confer on any Optionee any right to
continue in the employ of the Company, or to interfere in any way with the
right of the Company to terminate his or her employment or other
relationship with the Company at any time.
14.4 Reservation of Shares. The Company, during the term of this Plan,
at all times will reserve and keep available such number of shares of
Common Stock as shall be sufficient to satisfy the requirements of this
Plan.
15. Effectiveness of This Plan. This Plan shall become effective on the
date on which it is adopted by the Board of Directors of the Company. No
option granted under this Plan to any officer or director of the Company
shall become exercisable until the Plan is approved by the shareholders,
and any option granted before such approval shall be conditioned on and is
subject to such approval.
Adopted by the Board of Directors on July 10, 1996 and approved by the
shareholders on August 9, 1996.
Amended by the Board of Directors on October ___, 1996.
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