Exhibit 4.3c
Executive TeleCard, Ltd.
1995 Directors Stock Option and
Appreciation Rights Plan
Article I.
Establishment & Purpose
Section 1.1 Executive Telecard, Ltd. (the "Company"), a
Delaware corporation, hereby establishes a stock option and appreciation
rights plan to be named the Executive TeleCard, Ltd. 1995 Directors Stock
Option and Appreciation Rights Plan (the "Plan"). All options granted on
or after the date that this Plan has been approved and adopted by the
Company's board of directors shall be governed by the terms and conditions
of this Plan unless the terms of such an option specifically indicate that
it is not to be so governed. With respect to persons subject to Section
16 of the Securities Exchange Act of 1934 (the "Exchange Act"),
transactions under this Plan are intended to comply with all applicable
conditions of Rule 16b-3 or its successors under the Exchange Act ("Rule
16b-3").
Section 1.2 The purpose of this Plan is to provide persons
who are members of the board of directors (including employee-directors)
of the Company (the "Board of Directors") with incentives and rewards in
recognition of their services and other contributions which have been
critical to the success of the Company, and to induce such individuals to
continue to provide service to the Company in the future. The Plan
provides for the grant of options to purchase shares of common stock of
the Company, $.001 par value per share (the "Common Stock") which: a)
qualify as incentive stock options ("Incentive Options") under Section 422
of the Internal Revenue Code of 1986, as amended (the "Code") to directors
who are employees; and b) do not so qualify ("Non-Qualified Options") to
directors, including those who are not employees. This Plan also provides
for the grant of stock appreciation rights ("Rights") to all plan
participants in connection with the grant of options hereunder. Incentive
Options and Non-Qualified Options may be collectively referred to
hereafter as the "Options" as the context may require.
Section 1.3 Options may be granted pursuant to this Plan to
any Plan participant for a period commencing on the effective date of this
Plan (pursuant to Section 12 hereof) and ending not later than the tenth
(10th) anniversary of the date that this Plan is adopted by the Board of
Directors.
Article II.
Administration
Section 2.1 A Committee of the Board of Directors Committee
(the "Committee") shall be charged with administration of this Plan. The
Committee shall be comprised of not less than two members of the Board of
Directors, each of whom is a "disinterested person." A "disinterested
person" within the meaning of Rule 16b-3 as in effect upon the date this
Plan is adopted by the Board of Directors, is a person who has not been
granted or awarded equity securities (within the meaning of the Exchange
Act) under any other plan of the Company (or any affiliate thereof) at any
time within one year prior to such person's service as a member of the
Committee, or during such service except as otherwise permitted by Rule
16b-3(c). The Committee shall select one of its members to serve as the
chairman thereof, and shall hold its meeting at such times and places as
it may determine. At any such meeting, a majority of the total number of
members of the Committee shall be necessary to constitute a quorum.
Either the affirmative vote of a majority of the members present at any
meeting at which a quorum is present, or the unanimous approval in writing
of the total number of members of the Committee, shall be necessary to
constitute action by the Committee.
Section 2.2 The provisions of this Plan relating to Incentive
Options are also intended to comply in every respect with Section 422 of
the Code ("Section 422") and the regulations promulgated thereunder. In
the event that any future statute or regulation shall modify Section 422,
this Plan and any stock option grant relating to the grant of any
Incentive Option pursuant to this Plan, which option is outstanding and
unexercised at the time that any modifying statute or regulation becomes
effective and is subject to such modification, shall be deemed to
incorporate by reference such modification, and no notice of such
modification need be given to the Optionee (as hereinafter defined). Any
stock option grant relating to an Incentive Option shall provide that the
Optionee (as hereinafter defined) hold the stock received upon exercise of
such Incentive Option for a minimum of two years from the date of grant of
the Incentive Option and one year from the date of exercise of such
Incentive Option, absent the written approval, consent or waiver of the
Committee.
Section 2.3 If any provision of this Plan is determined to
disqualify the shares of Common Stock purchasable upon exercise of an
Incentive Option granted under this Plan from the special tax treatment
provided by Section 422, such provision shall be deemed to incorporate by
reference the modification required to qualify such shares of Common Stock
for said tax treatment.
Section 2.4 The Committee shall grant options to members of
the board of directors with terms and conditions not inconsistent with
this Plan pursuant to the non-discretionary formula set forth in Section
2.6 hereof. All Options granted pursuant to this Plan shall be clearly
identified as Incentive Options or Non-Qualified Options. The Committee
may from time to time adopt (and thereafter amend or rescind) such rules
and regulations for carrying out the provisions of this Plan and take such
action in the administration of this Plan, not inconsistent with the
provisions hereof, as it shall deem proper. The Committee shall have sole
discretion, subject to the express provisions of this Plan, to determine
the type of Option issued and the manner in which Options may be
exercised, and all other terms and conditions related to the Options and
Rights not specifically provided in the non-discretionary formula provided
in Section 2.6 hereof, including such terms and provisions which may be
amended from time to time as shall be required, in the judgment of the
Committee to conform to any change in any law or regulation applicable
hereto, and to make all other determinations deemed necessary or advisable
for the administration of this Plan. The interpretation and construction
of any provision of this Plan by the Committee (unless otherwise
determined by the Board of Directors) shall be final, conclusive and
binding upon all persons.
Section 2.5 The Committee shall grant in connection with the
grant of Options at the time of such grant, the right (previously defined
as a "Right" or collectively, the "Rights") to surrender all or part of
the Option to the extent that such Option is exercisable and receive in
exchange an amount payable in shares of Common Stock valued at the then
fair market value, determined in accordance with Section 5.1(b) herein,
equal to the difference (the "Spread") between the then fair market value
of the shares of Common Stock issuable upon the exercise of the Option (or
portions thereof surrendered) and the option price payable upon the
exercise of the Option (or portions thereof surrendered). Such rights
shall be subject to the following conditions: (a) the Rights will expire
at the same time as the underlying Option; (b) the Rights shall be for
100 percent of the Spread; (c) the Rights are transferable only when the
underlying Option is transferable and under the same conditions; (d) the
Rights may be exercised only when the underlying Option is eligible to be
exercised; and (e) the Rights may be exercised only when the Spread is
positive, i.e., when the market price of the Common Stock subject to the
Option exceeds the exercise price of the Option.
Section 2.6 Directors of the Company shall receive Options
and Rights hereunder on a non-discretionary basis in accordance with the
following formula: On the third Friday in December in each calendar year,
each member of the Board of Directors then serving shall receive an Option
to purchase ten thousand (10,000) shares of Common Stock at an exercise
price equal to the fair market value per share of such shares on that date
as determined in accordance with Section 5.1(b) of this Plan and a
corresponding Right. Directors who are employees shall receive Incentive
Stock Options, to the extent by the Code. Directors who are not employees
shall receive Non-Qualified Stock Options. Each such Option shall be
exercisable for a period of ten (10) years from the date of grant unless
sooner terminated pursuant to the terms of this Plan. Each such Option
shall be subject to the limitations on exercise and restrictions upon
transfer of the shares of Common Stock to be issued upon exercise of the
Option as are set forth elsewhere herein or as are imposed by applicable
laws including without limitation applicable federal and state securities
laws. Except as otherwise provided in this section, all Options issued
pursuant to this section shall be subject to the other terms and
conditions of this Plan. To the extent such terms and conditions are
inconsistent with this section this section shall control. To the extent
required pursuant to Rule 16b-3 as such rule relates to formula awards,
this section shall not be amended more than once every six months other
than to comport with changes in the Code, the Employee Retirement Income
Security Act or the rules thereunder.
Section 2.7 No member of the Committee shall be liable for
any action or determination made in good faith with respect to
administration of this Plan or the Options granted hereunder. A member of
the Committee shall be indemnified by the Company, pursuant to the
Company's by-laws, for any expenses, judgments or other costs incurred as
a result of a lawsuit filed against such member claiming any rights or
remedies arising out of such Director's participation in and
administration of this Plan.
Article III.
Total Number of Shares to be Optioned
Section 3.1 There shall be reserved for issuance or transfer
upon exercise of the Options to be granted from time to time under this
Plan an aggregate of eight hundred seventy thousand (870,000) shares of
Common Stock of the Company (subject to adjustment as provided in Article
VIII hereof). The shares of Common Stock issued upon exercise of any
Option granted under this Plan may be shares of Common Stock previously
issued and reacquired by the Company at any time or authorized but
unissued shares of Common Stock, as the Board of Directors from time to
time may determine.
Section 3.2 In the event that any Options outstanding under
this Plan for any reason expire or are terminated without having been
exercised in full or shares of Common Stock subject to Options are
surrendered in whole or in part pursuant to Rights granted under Section
2.6 hereof (except to the extent that shares of Common Stock are issued as
payment to the holder of the Option upon such surrender) the unpurchased
shares of Common Stock subject to such Option and any such surrendered
shares shall again be available for issuance under this Plan.
Section 3.3 No Options shall be granted pursuant to this Plan
to any Optionee after the tenth anniversary of the earlier of: (a) the
date that this Plan is adopted by the Board of Directors or (b) the date
that this Plan is approved by the stockholders of the Company.
Article IV.
Eligibility
Section 4.1 Subject to Section 2.6 above, Options may be
granted pursuant to this Plan to directors of the Company (or any of its
subsidiaries) as selected by the Committee. Incentive Options may be
granted pursuant to this Plan only to directors who are also employees of
the Company (or any of its subsidiaries) as selected by the Committee.
Persons granted Options pursuant to the Plan are referred to herein as
"Optionees." For purposes of determining who is an employee with respect
to eligibility for Incentive Options, Section 422 of the Code shall
govern. The Committee may determine (in its sole discretion) that any
person who would otherwise be eligible to be granted Options shall,
nonetheless, be ineligible to receive any award under this Plan. No
employee Director shall be eligible to receive more than 300,000 Options
under this Plan in any two (2) year period.
Section 4.2 No Options may be granted to any member of the
Committee or a member of the Board of Directors, other than pursuant to a
non-discretionary formula such as and including that which is set forth in
Section 2.6 above which meets the conditions in Rule 16b-3 under the
Exchange Act, nor may any Options be granted to a member of the Committee
if such member has, during the one year prior to such person's service as
a member of the Committee of this Plan or during such service, received
any equity securities pursuant to any plan of the Company or its
affiliates, other than pursuant to a non-discretionary formula such as and
including that which is set forth in Section 2.6 above which meets the
conditions in Rule 16b-3 under the Exchange Act. To the extent that any
provisions of this Plan or actions by the Committee fail to so comply, it
shall be deemed to be null and void, to the extent permitted by law and
deemed advisable by the Committee.
Article V.
Terms & Conditions of Options
Section 5.1 Each Option granted under this Plan shall be
subject to the following terms and conditions:
(a) The price at which each share of Common Stock covered by an
Option may be purchased shall be determined by the Board of
Directors or the Committee, provided that the option price for
any Incentive Option shall not be less than equal to the "fair
market value" of the shares of Common Stock at the time of grant
determined in accordance with Section 5.1(b) below.
Notwithstanding the foregoing, if an Incentive Option to
purchase shares of Common Stock is granted pursuant to the Plan
to an Optionee who, on the date of the grant, directly or
indirectly owns more than 10 percent of the voting power of all
classes of capital stock of the Company (or its parent of
subsidiary), not including the shares of Common Stock obtainable
upon exercise of the Option, the minimum exercise price of such
Option shall be not less than one hundred ten percent (110%) of
the "fair market value" of the shares of Common Stock on the
date of grant determined in accordance with Section 5.1(b)
below.
(b) the "fair market value" shall be determined by the
Committee which determination shall be binding upon the Company
and its directors. The determination of the fair market value
shall be based upon the following: (i) if the shares of Common
Stock are not listed and traded upon a recognized securities
exchange and there is no report of stock prices with respect to
the shares of Common Stock published by a recognized stock
quotation service then the Committee shall set the fair market
value based upon the recent purchases and sales of the shares of
Common Stock in arms length transactions; or (ii) if the shares
of Common Stock are not then listed and traded upon a recognized
securities exchange or listed for quotation on the NASDAQ
National Market System, and there are reports of stock prices by
a recognized quotation service, upon the basis of the last
reported sales or transaction price of such stock on the date of
grant as reported by a recognized quotation service, or, if
there is no last reported sale or transaction price on that day,
then upon the basis of the mean of the last reported closing bid
and closing asked prices for such stock on that day or on the
date nearest preceding that day; or (iii) if the shares of
Common Stock shall then be listed and traded upon a recognized
securities exchange or listed for quotation on the NASDAQ
National Market System, upon the basis of the last reported sale
or transaction price at which shares of Common Stock were traded
on such recognized securities exchange on the date of grant or,
if the shares of Common Stock were not traded on such date, upon
the basis of the last reported sale or transaction price on the
date nearest preceding that date. The Committee shall also
consider such other factors relating to the fair market value of
the shares of Common Stock as it shall deem appropriate.
(c) For the purpose of determining whether an Optionee owns
more than 10 percent of the voting power of all classes of stock
of the Company, an Optionee is considered to own those shares
which are owned directly or indirectly through brothers and
sisters (including half-blooded siblings), spouse, ancestors and
lineal descendants; and proportionately as a shareholder of a
corporation, a partner of a partnership, and/or a beneficiary of
a trust or an estate that owns shares of the Company.
(d) Notwithstanding any other provision of this Plan, in
accordance with the provision of Section 422(d) of the Code, to
the extent that the aggregate fair market value (determined at
the time the Option is granted) of the shares of Common Stock of
the Company with respect to which Incentive Options (without
reference to this provision) are exercisable for the first time
by any individual in any calendar year under any and all stock
option plans of the Company, its subsidiary corporations and its
parent (if any ) exceeds $100,000, such Options shall be treated
as Non-Qualified Options.
(e) An Optionee may, at the Committee's discretion, be granted
more than one Incentive Option or Non-Qualified Option during
the duration of this Plan, and may be issued a combination of
Non-Qualified Options and Incentive Options.
(f) Any Incentive Option granted to 10 percent or less
stockholder or any Non-Qualified Option shall, by its terms, be
exercised within ten years after the date the Option is granted
and any Incentive Option granted to a greater than 10 percent
stockholder shall, by its terms, be exercised within five years
after the date the Option is granted.
(g) An Option and any Right related thereto shall not be
transferable by the Optionee other than by will, or by the laws
of descent and distribution. An Option may be exercised during
the Optionee's lifetime only by the Optionee.
(h) At least six months shall have elapsed from the date on
which an Option is granted hereunder to the date on which any
share of Common Stock underlying such Option is sold or any
Right related thereto is exercised unless the Committee
otherwise consents in writing.
Article VI.
Employment or Service of Optionee
Section 6.1 If the service of an Optionee is terminated for
cause, the rights of such Optionee, both accrued and future, under any
then outstanding Option or Right shall terminate immediately. "Cause"
shall mean incompetence in the performance of duties, disloyalty,
dishonesty, theft, embezzlement, unauthorized disclosure of patents,
processes or trade secrets of the Company, individually or as an employee,
partner, associate, officer or director of any organization. The
determination of the existence and the proof of "cause" shall be made by
the Board of Directors. Such determination shall be binding on the
Optionee and the Company.
Section 6.2 If the employment or service of the Optionee is
terminated by the Optionee or the Company for any reason other than for
cause, death, or for disability, as defined in Section 22(e) (3) of the
Code, the option rights of such Optionee under any then outstanding
Options shall, subject to the provisions of Section 5.1(h) hereof, be
exercisable by such Optionee at any time prior to the expiration of the
Option or within three months after the date of such termination,
whichever period of time is shorter, by only to the extent of the accrued
right to exercise the Option at the date of such termination.
Section 6.3 In the case of an Optionee who becomes disabled,
as defined by Section 22(e)(3) of the Code, the option rights of such
Optionee under any then outstanding Option or Right may, subject to the
provisions of Section 5.1(h) hereof, be exercised by such Optionee at any
time prior to the expiration of the Option or within one year after the
date of termination of employment or service due to disability, whichever
period of time is shorter, but only to the extent of the accrued right to
exercise the Option or Right at the date of such termination.
Section 6.4 In the event of the death of an Optionee, the
rights of such Optionee under any then outstanding Option or Right shall
be exercisable by the person or persons to whom these rights pass by will
or by the laws of decent and distribution, at anytime prior to the
expiration of the Option or within three years after the date of death,
whichever period of time is shorter, but only the extent of the accrued
right to exercise the Option or Right at the date of death. If a person
or estate acquires the right to exercise a Option or Right by bequest or
inheritance, the Committee may require reasonable evidence as to the
ownership of such Option, and may require such consents and releases of
taxing authorities as the Committee may deem advisable.
Section 6.5 With the exception of Non-Qualified Options
issued pursuant to Section2.6 hereof, the Committee may also provide that
a director who is also an employee must continuously be employed by the
Company for such period of time as the Committee, in its discretion, deems
advisable before the right to exercise any portion of an Option or Right
granted to such employee will accrue, and may also set such other targets,
restrictions or other terms relating to the employment of the Optionee
which targets, restrictions, or terms must be fulfilled or complied with,
as the case may be, prior to the exercise of any portion of an Option or
Right granted to any employee-director.
Section 6.6 Options or Rights granted under this Plan shall
not be affected by any change of duties or position, so long as the
Optionee continues in the service of the Company.
Section 6.7 Nothing contained in this Plan, or in any Option
or Right granted pursuant to this Plan, shall confer upon any Optionee any
right with respect to continuance of employment or service by the Company
nor interfere in any way with the right of the Company to terminate the
Optionee's employment or service or change the Optionee's compensation at
any time.
Article VII.
Purchase of Shares
Section 7.1 Except as provided in this Article VII, an Option
shall be exercised by tender to the Company of the full exercise price of
the shares of Common Stock with respect to which the Option is being
exercised and written notice of such exercise. The right to purchase
shares of Common Stock shall be cumulative so that, once the right to
purchase any shares has accrued, such shares or any part thereof may be
purchased at any time thereafter until the expiration or termination of
the Option. A partial exercise of an Option shall not affect the right of
the Optionee to exercise the Option from time to time, in accordance with
this Plan, as to the remaining number of shares of Common Stock subject to
the Option. The purchase price of the shares shall be in United States
dollars, payable in cash or by certified bank check. Notwithstanding the
foregoing, in lieu of cash, an Optionee may, with the approval of the
Committee, exercise his or her Option by tendering to the Company shares
of Common Stock of the Company owned by him or her and having an aggregate
fair market value at least equal to the full exercise price. The fair
market value of any shares of Common Stock so surrendered shall be
determined by the Committee in accordance with Section 5.1(b) hereof.
Section 7.2 Except as provided in Article VI above, an Option
may not be exercised unless the holder thereof is a director of the
Company at the time of exercise.
Section 7.3 No Optionee, or Optionee's executor,
administrator, legatee, or distributee or other permitted transferee,
shall be deemed to be a holder of any shares of Common Stock subject to an
Option for any purpose whatsoever unless and until a stock certificate or
certificates for such shares are issued to such person under the terms of
this Plan. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the
date such stock certificate is issued, except as provided in Article VIII
hereof.
Section 7.4 If: (i) the listing, registration or
qualification of the Options issued hereunder, or of any securities
issuable upon exercise of such Options (the "Common Stock") upon any
securities exchange or quotation system or under federal or state law is
necessary as a condition of or in connection with the issuance or of
exercise of the Options, or (ii) the consent or approval of any
governmental regulatory body is necessary as a condition of or in
connection with the issuance or exercise of the Options, the Company shall
not be obligated to deliver the certificates representing the Subject
Securities or to accept or to recognize an Option exercise unless and
until such listing, registration, qualification, consent or approval shall
have been effected or obtained. The Company will take reasonable action
to so list, register or qualify the Options and the Subject Securities, or
effect or obtain such consent or approval, so as to allow for their
issuance.
Section 7.5 Any Optionee may be required to represent to the
Company as a condition of his or her exercise of Options issued under this
Plan that: (i) the Common Stock acquired upon exercise of his or her
Option are being acquired by him or her for investment purposes only and
not with a view to distribution or resale, unless counsel for the Company
is then of the view that such a representation is not necessary and is not
required under the Securities Act of 1933, as amended (the "Securities
Act"), or any other applicable statue, law, regulation or rule; and (ii)
that the Optionee shall make no exercise or disposition of an Option or of
the Common Stock in contravention of the Securities Act, the Exchange Act
or the rules and regulations thereunder. Optionees may also be required
to provide (as a condition precedent to exercise of an Option, such
documentation as may be reasonably required by the Company to assure
compliance with applicable law and the terms and conditions of this Plan
and the subject Option.
Section 7.6 An Option may also be exercised by tender to the
Company of a written notice of exercise together with advice of the
delivery of an order to a broker to sell part or all of the shares of
Common Stock subject to such exercise notice and an irrevocable order to
such broker to deliver to the Company (or its transfer agent) sufficient
proceeds from the sale of such shares to pay the exercise price and any
withholding taxes. All documentation and procedures to be followed in
connection with such a "cashless exercise" shall be approved in advance by
the Committee.
Article VIII.
Change in Number of Outstanding Share of
Stock, Adjustments,Reorganizations, etc.
Section 8.1 In the event that the outstanding shares of
Common Stock of the Company are hereafter increased or decreased or
changed into or exchanged for a different number of shares or kind of
shares or other securities of the Company or of another corporation by
reason or reorganization, merger, consolidation, re-capitalization,
reclassification, stock split, combination of shares or a dividend payable
in capital stock , appropriate adjustment shall be made by the Committee
in the number and kind of shares for the purchase of which Options may be
granted under this Plan, including the maximum number that may be granted
to any one person. In addition, the Committee shall make appropriate
adjustments in the number and kind of shares as to which outstanding
Options, or portions thereof then unexercised shall be exercisable, to the
extent that the Optionee's proportionate interest shall be maintained as
before the occurrence to the unexercised portion of the Option and with a
corresponding adjustment in the option price per share. Any such
adjustment made by the Committee shall be conclusive.
Section 8.2 The grant of an Option pursuant to this Plan
shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital
or business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or assets.
Section 8.3 Upon the dissolution or liquidation of the
Company, or upon a reorganization, merger or consolidation of the Company
as a result of which the outstanding securities of the class then subject
to Options hereunder are changed into or exchanged for cash or property or
securities not of the Company's issue, or upon a sale of substantially all
the property of the Company to an association, person, party, corporation,
partnership, or "control group" as that term is construed for the purposes
of the Exchange Act, this Plan shall terminate unless provision be made in
writing in connection with such transaction for the continuance of this
Plan or for the substitution for such Option or Options covering the stock
of a successor employer corporation, or a present or a subsidiary thereof,
with appropriate adjustments as to the number and kind of shares and
prices, in which event this Plan and the Options theretofore granted shall
continue in the manner and under the terms so provided. If this Plan
shall terminate pursuant to the foregoing sentence, all persons owning any
unexercised portions of the Options then outstanding shall have the right
, at such time prior to the consummation of the transaction causing such
termination as the Company shall designate, to exercise the unexercised
portions of such Options, including the portions thereof which would, but
for this Section 8.3, not yet be exercisable.
Section 8.4 If, while any Options remain outstanding under
the Plan, (i) the "beneficial ownership" (as defined Rule 13d-3 under the
Exchange Act) of securities representing more than 20% of the combined
voting power of the Company is acquired by a person (as defined in section
13(d) of the Exchange Act, other than the Company or an affiliate of the
Company), (ii) the stockholders of the company approve a definitive
agreement to merge or consolidate the Company with another company or to
sell or otherwise dispose of all or substantially all of it's assets, or
(iii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the members of the board of directors
cease to constitute at least a majority of the members of the board of
directors at any time during such period for any reason (other than in the
case of a director whose election by the Board or nomination by the
Company's stockholders was approved by a vote of at least two thirds of
the directors then still in office who are either directors at the
beginning of the period or whose election or nomination for election was
previously so approved), then all Options then outstanding shall become
fully vested and exercisable on the date of such event.
Article IX.
Duration, Amendment & Termination
Section 9.1 The Board of Directors may at any time terminate
this Plan or make such amendments hereto as it shall deem advisable and in
the best interests of the Company, without action on the part of the
stockholders of the Company, unless such approval is required pursuant to
Section 422 of the Code or the regulations thereunder or Rule 16b-3 under
the Exchange Act; provided, however, that no such termination or amendment
shall without the consent of the individual to whom any Option shall
heretofore have been granted, affect or impair the rights of such
individual under such Option, and provided further, that unless the
holders of a majority of all classes of the Company's outstanding voting
stock entitled to vote thereon shall have first approved thereof, no
amendment of this Plan shall be made whereby: (a) the total number of
shares of Common Stock which may be issued pursuant to the exercise of
Options under this Plan to all individuals, or any of them, shall be
increased, except by operation of the adjustment provisions of Article
VIII hereof, (b) the authority to administer this Plan by the Committee
shall be withdrawn, (c) the maximum term of the Options shall be extended,
(d) the minimum option price of Incentive Options shall be decreased, (e)
the price to Optionees to whom Options have been granted shall be changed
or (f) the class of individuals eligible to participate in this Plan is
modified. Pursuant to Section 422(b) of the Code, no Incentive Option may
be granted pursuant to this Plan after ten years from the date this Plan
is adopted or the date this Plan is approved by the stockholders of the
Company, whichever is earlier.
Article X.
Restrictions
Section 10.1 Any shares of Common Stock issued pursuant to
exercise of Options granted under this Plan shall be subject to such
restrictions or transfer and limitations as shall, in the opinion of the
Committee, be necessary or advisable to assure compliance with the laws,
rules and regulations of the United States government or any state or
jurisdiction thereof. In addition, except for those Non-Qualified Options
issued pursuant to Section 2.6 above, the Committee may impose such other
restrictions upon the exercise of an Option or upon the sale or other
disposition of the shares of Common Stock deliverable upon exercise
thereof as the Committee may, in its sole discretion, determine. By
accepting an award pursuant to the Plan, each Optionee shall thereby agree
to any such restrictions.
Section 10.2 Any certificate issued to evidence shares of
Common Stock issued pursuant to exercise of an Option shall bear such
legends and statements as the Committee, the Board of Directors or counsel
to the Company shall deem advisable to assure compliance with the laws,
rules and regulations of the United States government or any state or
jurisdiction thereof. No shares of Common Stock will be delivered
pursuant to exercise of the Option granted under this Plan until the
Company has obtained such consents or approvals from such regulatory
bodies of the Untied States Government of any state or jurisdiction
thereof as the Committee, the Board of Directors or counsel to the Company
deems necessary or advisable.
Article XI.
Application of Funds
Section 11.1 The proceeds received by the Company from the
issuance and sale of Common Stock upon exercise of Options granted
pursuant to the Plan are to be added to the general funds of the Company
and used for its corporate purposes as determined by the Board of
Directors.
Article XII.
Effectiveness of Plan
Section 12.1 This Plan shall become effective upon adoption by
the Board of Directors, and Options may be issued hereunder from and after
that date subject to the provisions of Section 3.3 above. This Plan must
be approved by the Company's stockholders in accordance with the
applicable provisions (relating to the issuance of stock or options) of
the Company's governing documents and state law or, if no such approval is
prescribed therein, by the affirmative vote of the holders of a majority
of the votes cast at a duly held stockholders' meeting at which a quorum
representing a majority of all the Company's outstanding voting stock is
present and voting (in person or by proxy) or, without regard to any
required time period for approval, by any other method permitted by
Section 422 of the Code and the regulations thereunder. If such
stockholder approval is not obtained within one year of the adoption of
this Plan by the Board of Directors or within such other time period
required under Section 422 of the Code and the regulations thereunder,
this Plan shall remain in force, provided however, that all Options issued
and issuable hereunder shall automatically be deemed to be Non-Qualified
Options and provided further that no Option granted to any person subject
to Section 16 of the Exchange Act shall be exercisable until such time as
stockholder approval of this Plan has been obtained.
IN WITNESS WHEREOF, pursuant to the approval or adoption of this
Plan by the Board of Directors, this Plan is executed and adopted this
14th day of December, 1995.
EXECUTIVE TELECARD, LTD.
By: /s/ Edward J. Gerrity, Jr.
Edward J. Gerrity, Jr.
Its: Chairman of the Board
(CORPORATE SEAL)
ATTEST:
By: /s/ John J. Gitlin
Secretary