EXHIBIT 4.2
DATAMETRICS CORPORATION
EMPLOYEE QUALIFIED STOCK PURCHASE PLAN
Datametrics Corporation, a Delaware corporation (the "Company"), hereby
adopts this Employee Qualified Stock Purchase Plan (the "Q.S.P. Plan").
1. PURPOSE. The purpose of the Q.S.P. Plan is to assist employees of the
Company and its Subsidiary Corporations in acquiring stock ownership interests
in the Company, pursuant to a plan which qualifies as an "employee stock
purchase plan" under Code Section 423. The Q.S.P. Plan is intended to help
employees provide for their future security, and to encourage them to remain
in the employ of the Company and its Subsidiary Corporations.
2. DEFINITIONS. Whenever one of the following terms is used in the Q.S.P.
Plan with the first letter or letters capitalized, it shall have the following
meaning, unless the context clearly indicates to the contrary (such
definitions to be equally applicable to the singular and plural forms of the
terms defined):
(a) "Administrator" shall mean the Company, acting through its Chief
Executive Officer or his or her delegate.
(b) "Authorization Card" shall mean the form prescribed by the
Administrator, which shall include a form of stock purchase agreement
pursuant to which an Eligible Employee shall purchase shares of Stock under
the Q.S.P. Plan and a form of payroll deduction authorization pursuant to
which such Eligible Employee shall authorize the Company or a Subsidiary
Corporation to deduct such Eligible Employee's contributions under the
Q.S.P. Plan.
(c) "Base Pay" shall mean gross pay received by an Employee on each
Payday as cash compensation for services to the Company or any Subsidiary
Corporation, excluding overtime payments, incentive compensation, bonuses,
fringe benefits, expense reimbursements, and other special-payments, except
to the extent that the inclusion of any such item is specifically
designated by the Administrator.
(d) "Board of Directors" shall mean the Board of Directors of the
Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(f) "Company" shall mean Datametrics Corporation, a Delaware corporation.
(g) "Effective Date" shall mean the first day of the Offer Period which
shall be January 29, 1996.
(h) "Eligible Employee" shall mean any Employee who satisfies the
requirements of Section 4.
(i) "Employee" shall mean any person who renders services to the Company
or any Subsidiary Corporation in the status of an employee within the
meaning of Code Section 3121(d). "Employee" shall not include any director
of the Company or any Subsidiary Corporation who does not render services
to the Company or any Subsidiary Corporation in the status of an employee
within the meaning of Code Section 3121(d).
(j) "Enrollment Period" shall mean, for each Semi-Annual Period of
Participation, the two week period determined in accordance with Section
6(b); provided, however, that pursuant to Section 6(b) the Enrollment
Period for the first Semi-Annual Period of Participation shall be the three
week period immediately preceding the Effective Date.
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(k) "Entry Date" shall mean the date an Eligible Employee is granted an
Option during the Offer Period. The earliest Entry Date under the Q.S.P.
Plan shall be the Effective Date. Subsequent Entry Dates under the Q.S.P.
Plan shall be the first business day of July 1996; the first business day
of January 1997; and the first business day of July 1997. Each Eligible
Employee shall have no more than one (1) Entry Date at any time under the
Q.S.P. Plan.
(l) "Offer Period" shall mean the period beginning on the Effective Date
and ending on December 31, 1997.
(m) "Option" shall mean a right granted to an Eligible Employee to
purchase shares of Stock under Sections 8(a) and 9 of the Q.S.P. Plan.
(n) "Option Price" shall mean the per share exercise price of shares of
Stock to be purchased pursuant to a semi-annual installment of an Option,
as provided in Section 10.
(o) "Parent Corporation" shall mean any corporation, other than the
Company, in an unbroken chain of corporations ending with the Company if,
at the time of the granting of the Option, each of the corporations other
than the Company own stock possessing 50% or more of the total combined
voting power of all classes of stock in one of the other corporations in
such chain.
(p) "Participant" shall mean an Eligible Employee who elects to
participate in the Q.S.P. Plan and complies with the provisions of Section
6.
(q) "Payday" of an Employee shall mean the regular and recurring
established day for payment of cash compensation to Employees in the same
classification or position.
(r) "Q.S.P. Plan" shall mean the Datametrics Corporation Employee
Qualified Stock Purchase Plan.
(s) "Semi-Annual Period of Participation" shall mean each semi-annual
period for which the Participant actually participates in the Offer Period.
There shall be four (4) semi-annual periods of participation within the
Offer Period. The first such semi-annual period shall begin on January 29,
1996 and end on the last business day in June 1996. The second such semi-
annual period shall begin on the first business day in July 1996 and end on
the last business day in December 1996. The third such semi-annual period
shall begin on the first business day in January 1997 and end on the last
business day in June 1997. The fourth such semi-annual period shall begin
on the first business day in July 1997 and end on the last business day in
December 1997.
(t) "Semi-Annual Purchase Date" shall mean the last business day of June
and December each year during the Offer Period on which shares of Stock are
automatically purchased for Participants under the Q.S.P. Plan.
(u) "Subsidiary Corporation" shall mean any corporation, other than the
Company, in an unbroken chain of corporations beginning with the Company
if, at the time of the granting of the Option, each of the corporations
other than the last corporation in the unbroken chain owns stock possessing
50% or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
(v) "Stock" shall mean the shares of the Company's Common Stock, $.01 par
value.
3. STOCK SUBJECT TO THE Q.S.P. PLAN.
(a) Subject to Section 15, the shares of Stock that may be sold pursuant to
Options granted under the Q.S.P. Plan shall not exceed 200,000 shares.
(b) The maximum aggregate number of shares of Common Stock each Eligible
Employee may purchase over the duration of the Q.S.P. Plan shall not exceed
10,000 shares.
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(c) The Company shall reserve for issuance under the Q.S.P. Plan 200,000
shares of the Company's authorized but unissued Stock.
(d) If any Option expires or is cancelled without having been fully
exercised, the number of shares subject to such Option but as to which such
Option was not exercised before its expiration or cancellation may again be
optioned hereunder, subject to the limitations of subsection (a).
(e) Any adjustment to the number of shares of Stock reserved for issuance
under the Q.S.P. Plan shall be made only in accordance with Sections 15
(relating to recapitalization) and 18 (relating to amendments of the Q.S.P.
Plan).
4. ELIGIBILITY. Each Employee of the Company or any Subsidiary Corporation
who on the first day of any Enrollment Period:
(a) has been employed by the Company or any Subsidiary Corporation for
not less than thirty (30) days; and
(b) is customarily employed by the Company or any Subsidiary Corporation
for more than twenty (20) hours per week,
shall become an Eligible Employee on such day. An Employee who is an Eligible
Employee on the Effective Date may elect to begin participating in the Q.S.P.
Plan on any Entry Date on or after the Effective Date. The Effective Date
shall become such Employee's Entry Date for the Offer Period, and on that date
such Employee shall be granted an Option for the Offer Period; provided,
however, that any such Option is subject to cancellation and such Employee's
Entry Date may be changed in accordance with the terms of Section 9. An
Employee who is not an Eligible Employee on the Effective Date may
subsequently elect to participate in the Q.S.P. plan on any Entry Date for
which he or she becomes an Eligible Employee. The first Entry Date on which
such Employee is an Eligible Employee shall become such Employee's Entry Date
for the Offer Period, and on that date such Employee shall be granted an
Option for the Offer Period; provided, however, that any such Option is
subject to cancellation and that such Employee's Entry Date may alter in
accordance with the terms of Section 9.
5. PURCHASE RIGHTS.
(a) Options shall be granted under the Q.S.P. Plan until the earlier of the
maximum number of shares of Stock subject to sale pursuant to Options have
been sold, or the Q.S.P. Plan is terminated.
(b) The Q.S.P. Plan shall be implemented under the Offer Period. Subject to
subsection (c), the Offer Period will begin upon January 29, 1996 and will end
on December 31, 1997. The first day of the Offer Period shall be the first day
of the first Semi-Annual Period of Participation.
(c) Under no circumstances shall any shares of Stock be issued hereunder
until such time as (i) the Q.S.P. Plan shall have been approved by the
Company's stockholders and (ii) the Company shall have complied with all
applicable requirements of the Securities Act of 1933 (as amended), all
applicable listing requirements of any securities exchange on which shares of
the Stock are listed and all other applicable statutory and regulatory
requirements.
(d) Each Eligible Employee shall be granted a separate Option for the Offer
Period. The Option shall be granted on the Entry Date on which such individual
joins the Offer Period and shall be automatically exercised in successive
semi-annual installments on the last day of each Semi-Annual Period of
Participation in which the Eligible Employee participates. Accordingly, each
Option may be exercised up to two (2) times each calendar year it remains
outstanding. An Option granted under the Q.S.P. Plan may be cancelled pursuant
to Section 9. In such event, the date on which a subsequent Option is granted
to each Eligible Employee under the Q.S.P. Plan shall become the Entry Date
for such Eligible Employee and such date shall supersede and replace any
previous Entry Date.
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6. PARTICIPATION IN THE Q.S.P. PLAN.
(a) Each Eligible Employee may elect to participate in the Q.S.P. by
submitting to the Administrator a completed and executed Authorization Card in
accordance with subsection (b). An Eligible Employee who elects to participate
in the Q.S.P. Plan shall elect on such Authorization Card any whole percentage
of Base Pay (such percentage not to exceed ten percent (10%)) to be withheld
by payroll deduction, which upon an exercise of a semi-annual installment of
the Option granted to such Eligible Employee with respect to the Offer Period,
shall be contributed to the Company as payment for shares of Stock purchased
pursuant to such semi-annual installment of the Option. The deduction rate
authorized by any Eligible Employee shall continue in effect for the remainder
of the Offer Period, except to the extent such rate is changed in accordance
with the following:
(i) Each Eligible Employee may, at any one time during each Semi-Annual
Period of Participation at least two weeks prior to the Semi-Annual
Purchase Date, reduce his or her percentage of payroll deduction to any
whole percentage by filing a new completed and executed Authorization Card
with the Administrator (or his or her designate). At any one time during
the two week period commencing one month prior to the Semi-Annual Purchase
Date an Eligible Employee may increase his or her percentage of payroll
deduction (not to exceed ten percent (10%)) by filing a new completed and
executed Authorization Card with the Administrator (or his or her
designate), with such increase to become effective beginning on the first
day of the next Semi-Annual Period of Participation. An Eligible Employee
may not increase or reduce his or her percentage of payroll deduction
during the two week period immediately preceding each Semi-Annual Purchase
Date. Any reduction of an Eligible Employee's percentage of payroll
deduction shall become effective as soon as practicable after the filing of
a new completed and executed Authorization Card with the Administrator (or
his or her designate). If an Eligible Employee reduces his or her
percentage of payroll deduction to zero percent (0%), the Company or
Subsidiary Corporation will as soon as practicable thereafter pay to such
Eligible Employee in cash in one lump sum the balance of payroll deductions
credited to such Eligible Employee's account under the Q.S.P. Plan, without
the payment of any interest thereon. The Eligible Employee will at that
time be deemed to have ceased to participate in the Q.S.P. Plan and may
only recommence active participation in the Q.S.P. Plan by submitting to
the Administrator a new completed and executed Authorization Card in
accordance with subsection (b). Upon cessation of participation, such
Eligible Employee shall not be eligible to participate in the Q.S.P. Plan
during the Semi-Annual Period of Participation which immediately follows
the Semi-Annual Period of Participation during which such Employee ceased
to participate in the Q.S.P. Plan.
(b) An Employee who is an Eligible Employee on the Effective Date must
submit his or her Authorization Card to the Administrator during the three
week period immediately prior to the Effective Date in order to participate in
the first Semi-Annual Period of Participation. An Employee who is an Eligible
Employee on the Effective Date but who does not submit his or her
Authorization Card to the Administrator during such three week period or an
Employee who becomes an Eligible Employee subsequent to the Effective Date
must submit his or her Authorization Card to the Administrator during the two
week period commencing one month prior to such Eligible Employee's Entry Date.
(c) An Eligible Employee's Authorization Card shall include express written
authorization by the Eligible Employee to the Company to issue shares of Stock
purchased under the Q.S.P. Plan to an account in the name of such Eligible
Employee with a brokerage firm to be designated by the Administrator.
7. PAYROLL DEDUCTIONS.
(a) Cash compensation payable to an Eligible Employee who elects to
participate in the Q.S.P. Plan for a Semi-Annual Period of Participation shall
be reduced each Payday during such Semi-Annual Period of Participation through
payroll deductions by an amount equal to the whole percentage of Base Pay
payable on such Payday elected by the Eligible Employee under Section 6.
(b) The amount of each Eligible Employee's payroll deduction shall be held
by the Company or Subsidiary Corporation and credited to an account
established for such Eligible Employee. Neither the Company nor any Subsidiary
Corporation shall pay any interest on the funds credited to an Eligible
Employee's account under the Q.S.P. Plan.
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(c) During a leave of absence from the Company or any Subsidiary Corporation
which is approved by the Company or Subsidiary Corporation and which meets the
requirements of Treasury Regulation Section 1.421-7(h)(2), an Eligible
Employee may continue to participate in the Q.S.P. Plan by making cash
payments to the Company or Subsidiary Corporation on each Payday equal to the
dollar amount of the payroll deduction made for such Eligible Employee for the
Payday next preceding the first day of such Eligible Employee's leave of
absence.
8. GRANT OF OPTIONS; EXERCISE OF OPTIONS.
(a) Each Eligible Employee shall be granted an Option on his or her Entry
Date for the Offer Period. Each Eligible Employee's Option shall be
automatically exercised in semi-annual installments on the last day of each
Semi-Annual Period of Participation during which the Eligible Employee is
participating in the Q.S.P. Plan. The number of shares of Stock subject to
each installment of an Eligible Employee's Option shall be the quotient of the
total payroll deductions made for the Eligible Employee during the Semi-Annual
Period of Participation, divided by the Option Price with respect to such
Semi-Annual Period of Participation, excluding fractional shares of Stock;
provided, however, that the number of shares of Stock subject to each Option
shall not exceed 10,000 shares.
(b) Except as otherwise provided in subsection (d) and Section 6(a)(i), each
Eligible Employee participating in the Q.S.P. Plan shall be deemed to have
exercised a semi-annual installment of his or her Option on the last day of
any Semi-Annual Period of Participation in which the Eligible Employee is
participating in the Q.S.P. Plan, to the extent that the balance of payroll
deductions credited to such Eligible Employee's account under the Q.S.P. Plan
is sufficient to purchase, at the Option Price, whole shares of Stock. No
fractional shares of Stock shall be purchased upon the exercise of a semi-
annual installment of the Option and any funds credited to such Eligible
Employee's account remaining after the purchase of whole shares of Stock upon
exercise of a semi-annual installment of an Option shall remain credited to
such Eligible Employee's account and carried forward for purchase of shares of
Stock pursuant to the exercise of a semi-annual installment of the Option on
the last day of the next following Semi-Annual Period of Participation.
(c) Upon exercise of a semi-annual installment of an Eligible Employee's
Option, the Company shall as soon as practicable thereafter issue to the
Eligible Employee such shares of Stock purchased pursuant to subsection (b).
Such Stock is initially to be held in the brokerage account established by the
Eligible Employee at such brokerage firm as designated by the Administrator
and as authorized by the Eligible Employee upon enrollment in the Q.S.P. Plan.
(d) An Eligible Employee's semi-annual installment shall not be exercised on
the Semi-Annual Purchase Date if such Eligible Employee instructs the
Administrator in writing at least two weeks prior to such Semi-Annual Purchase
Date that such semi-annual installment is not to be exercised. As soon as
practicable after receipt of such instruction, the Company or Subsidiary
Corporation shall pay to such Eligible Employee in cash in one lump sum the
balance of payroll deductions credited to such Eligible Employee's account
under the Q.S.P. Plan, without the payment of any interest thereon. The
Eligible Employee shall at that time be deemed to have ceased to participate
in the Q.S.P. Plan and may only recommence active participation in the Q.S.P.
Plan by submitting a new Authorization Card in accordance with the terms of
Section 6 above. Upon cessation of participation, such Eligible Employee shall
not be eligible to participate in the Q.S.P. Plan during the Semi-Annual
Period of Participation which immediately follows the Semi-Annual Period of
Participation during which such Employee ceased to participate in the Q.S.P.
Plan.
(e) If the total number of shares of Stock for which Options are to be
exercised on any date exceeds the number of shares remaining unsold under the
Q.S.P. Plan (after deduction of all shares for which Options have theretofore
been exercised), the Administrator shall make a pro rata allocation of the
available remaining shares in as nearly a uniform manner as shall be
practicable and any balance of payroll deductions credited to the accounts of
Eligible Employees which have not been applied to the purchase of shares of
Stock shall be paid to such Eligible Employees by the Company or Subsidiary
Corporation in cash in one lump sum as soon as practicable, without payment of
any interest thereon.
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(f) Notwithstanding any provision in the Q.S.P. Plan to the contrary, an
Eligible Employee shall not be granted an Option:
(i) if, immediately after the Option is granted, such Employee would own
stock possessing 5% or more of the total combined voting power or value of
all classes of stock of the Company, any Parent Corporation or any
Subsidiary Corporations. For purposes of determining stock ownership under
this paragraph, the rules of Code Section 424(d) shall apply and Stock
which an Eligible Employee may purchase under outstanding options held by
such Eligible Employee shall be treated as stock owned by such Eligible
Employee; or
(ii) which permits such Eligible Employee's rights to purchase stock
under the Q.S.P. Plan and all other employee stock purchase plans of the
Company, any Parent Corporation, or any Subsidiary Corporations, which
qualify under Code Section 423, to accrue at a rate which exceeds $25,000
of the fair market value of such stock (determined at the time such option
is granted) for each calendar year in which such option is outstanding at
any time. For purpose of the limitations imposed by this paragraph, the
right to purchase stock under an option accrues when the option (or any
portion thereof) first becomes exercisable during the calendar year, the
right to purchase stock under an option accrues at the rate provided in the
option (but in no case may such rate exceed $25,000 of fair market value of
such stock determined at the time such option is granted for any one
calendar year), and a right to purchase stock which has accrued under the
option may not be carried over to any other option.
(g) Any Employee who is an officer subject to Section 16(b) under the
Securities Exchange Act of 1934, as amended, shall not sell, transfer, or
otherwise dispose of any shares of Stock received upon the exercise of the
Option granted hereunder for a period of six months after the purchase of such
shares.
9. CANCELLATION AND SUBSEQUENT GRANT OF OPTION. If the fair market value of
a share of Stock on the first day of any Semi-Annual Period of Participation
after the Effective Date is lower than the fair market value of a share of
Stock on the Eligible Employee's Entry Date into the Q.S.P. Plan, the Eligible
Employee's Option shall be cancelled as of the first day of such Semi-Annual
Period of Participation and the Eligible Employee's purchase rights with
respect to any remaining semi-annual installments under such Option shall be
immediately extinguished without any further action by the Company, any
Subsidiary Corporation, or the Eligible Employee. Upon such cancellation, a
new Option shall be granted to such Eligible Employee which may thereafter be
exercised in successive semi-annual installments on the last day of such Semi-
Annual Period of Participation and each subsequent Semi-Annual Period of
Participation; provided, however, that such Option may also subsequently be
cancelled in accordance with the terms of this Section. In the event that an
Option is cancelled and a new Option granted under this Section, the Eligible
Employee's Entry Date for purposes of the provisions of the Q.S.P. Plan shall
become the date upon which such new Option is granted.
10. OPTION PRICE.
(a) The per share exercise price of each Option (the "Option Price") shall
be an amount equal to the lesser of:
(i) 85% of the fair market value of a share of Stock on the Participant's
Entry Date into the Q.S.P. Plan; or
(ii) 85% of the fair market value of a share of Stock on the Semi-Annual
Purchase Date corresponding to the Semi-Annual Period of Participation for
which a Participant exercises a semi-annual installment of his or her
Option.
(b) For purposes of subsection (a) and Section 9, the fair market value of a
share of Stock as of a given date shall be the closing price of a share of
Stock on the principal exchange on which shares of Stock are then trading, if
any, on such date, or, if shares were not traded on such date, then on the
next preceding trading day during which a sale occurred.
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11. ISSUANCE OF CERTIFICATES.
(a) In the event the Administrator is required to obtain authority to issue
certificates for any shares of Stock purchased by an Eligible Employee under
the Q.S.P. Plan from any commissioner or agency, the Administrator shall seek
to obtain such authority. If the Administrator is unable, after reasonable
efforts, to obtain such authority, the Administrator, the Company, and any
Subsidiary Corporations shall be relieved from all liability and shall pay to
each such Eligible Employee the balance of payroll deductions credited to each
such Eligible Employee's account under the Q.S.P. Plan in cash in one lump sum
as soon as practicable, without the payment of any interest thereon.
12. CESSATION OF PARTICIPATION.
(a) Except as otherwise provided in Subsection 7(c), an Eligible Employee
shall cease to participate in the Q.S.P. Plan in the event that:
(i) the Eligible Employee reduces his or her percentage of payroll
deduction to zero percent (0%) pursuant to Section 6(a)(i);
(ii) the Administrator receives written instructions from the Eligible
Employee that a semi-annual installment is not to be exercised pursuant to
Section 8(d);
(iii) the Administrator receives written instructions from the Eligible
Employee to terminate such Eligible Employee's participation in the Q.S.P.
Plan;
(iv) the Eligible Employee resigns, is discharged from employment or has
a leave of absence from the Company or any Subsidiary Corporation; or
(v) the Employee dies.
(b) Upon cessation of participation by an Eligible Employee, such Eligible
Employee's payroll deductions shall cease. If such cessation of participation
occurs during the last two weeks of a Semi-Annual Period of Participation,
such Eligible Employee's Option installment shall be exercised on the Semi-
Annual Purchase Date in accordance with Section 8(b). Upon cessation of
participation at any other time, any balance of payroll deductions credited to
such Eligible Employee's account under the Q.S.P. Plan shall be paid to the
Employee in cash in one lump sum as soon as practicable after cessation of
participation, without payment of any interest thereon.
(c) An Eligible Employee shall not be eligible to participate in the Q.S.P.
Plan during the Semi-Annual Period of Participation which immediately follows
the Semi-Annual Period of Participation during which such Employee terminates
participation in the Q.S.P. Plan under paragraph (a).
13. TRANSFER OF OPTION. Options granted pursuant to the Q.S.P. Plan shall
not be transferable by an Eligible Employee, other than by will or the laws of
descent and distribution, and shall be exercisable during the Eligible
Employee's lifetime only by such Eligible Employee.
14. BENEFICIARY.
(a) Each Eligible Employee shall designate on his or her Authorization Card
a beneficiary or beneficiaries and may, without such beneficiaries' consent,
change such designation. Any designation shall be effective only after it is
received by the Administrator and shall be controlling over any disposition by
will or otherwise. Upon the death of an Eligible Employee, except as provided
in Section 12(b) the balance of payroll deductions credited to such Eligible
Employee's account shall be paid or distributed to the designated beneficiary
or beneficiaries, or in the absence of such designation, to the executor or
administrator of the Eligible Employee's estate, and in either event the
Administrator, the Company, and any Subsidiary Corporations shall not be under
any further liability to anyone.
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15. RECAPITALIZATION. If there shall be any change in the Stock subject to
the Q.S.P. Plan or the Stock subject to any Option, through merger,
consolidation, reorganization, recapitalization, reincorporation, stock split,
stock dividend (in excess of 2% of the fair market value of the Stock) or
other change in the corporate structure of the Company, appropriate
adjustments shall be made by the Administrator to the aggregate number of
shares subject to the Q.S.P. Plan and the number of shares and the price per
share subject to outstanding Options in order to preserve, but not to
increase, the benefits of the Eligible Employees hereunder; provided, however,
that subject to any required action by the stockholders, if the Company shall
not be the surviving corporation in any such merger, consolidation or
reorganization, every Option outstanding shall terminate, unless the surviving
corporation shall (subject to applicable provisions of the Code) issue a new
Option therefor or assume (with appropriate changes) the existing Option. If
the Option shall terminate by reason of such merger, consolidation, or
reorganization, then any provision herein to the contrary notwithstanding, any
Option held by an Eligible Employee may be exercised, in whole or in part, by
such Eligible Employee at any time prior to or concurrently with consummation
of such merger, consolidation, or reorganization.
16. RIGHTS AS A STOCKHOLDER. An Eligible Employee shall have no rights as a
stockholder with respect to any shares of Stock covered by Options until the
date of the issuance of a certificate for such shares of Stock. No adjustments
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 certificate is issued, except as
otherwise expressly provided herein.
17. COSTS; INDEMNIFICATIONS.
(a) The Company shall pay all costs and expenses incurred in administering
the Q.S.P. Plan.
(b) In addition to such other rights of indemnification as the Administrator
may have as a director or officer of the Company, the Company shall indemnify
and hold the Administrator harmless against any and all liability, loss,
costs, damages, attorneys' fees and other expenses the Administrator may
sustain or incur in connection with administration of the Q.S.P. Plan, except
for liability, loss, costs, damages, attorneys' fees and other expenses caused
by the negligence of the Administrator or his agent; provided, that within 60
days after the institution of any action, suit or proceeding the Administrator
shall in writing offer the Company the opportunity to handle, prosecute or
defend the same, at the Company's own expense. The Administrator shall have
the right, but not the obligation, to adjust, settle, or compromise any claim,
obligation, debt, demand, suit or judgment against the Administrator, and if
such settlement is approved by independent legal counsel selected by the
Company then the Company shall reimburse the Administrator for all sums of
money the Administrator may pay or become liable to pay against which the
Administrator is indemnified hereunder.
18. AMENDMENT OR TERMINATION OF THE Q.S.P. PLAN. The Board of Directors may
at any time, with respect to any shares of Stock not then subject to Options,
suspend or terminate the Q.S.P. Plan, and may amend the Q.S.P. Plan from time
to time as the Board of Directors may deem advisable; provided, however, that
except as provided in Section 15 hereof, the Board of Directors shall not
amend the Q.S.P. Plan in the following respects without the affirmative vote
of approval by a majority of the outstanding shares of Stock of the Company:
(a) To increase the maximum number of shares of Stock subject to the
Q.S.P. Plan;
(b) To change the designation or class of employees eligible to receive
Options under the Q.S.P. Plan;
(c) To materially increase the benefits accruing to Employees under the
Q.S.P. Plan; or
(d) In any manner which would cause the Q.S.P. Plan to no longer be an
employee stock purchase plan under Code Section 423.
19. APPLICATION OF FUNDS. The proceeds received by the Company from the sale
of Stock pursuant to the exercise of Options shall be deposited in the account
of the general corporate funds of the Company.
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20. APPROVAL OF STOCKHOLDERS. The Q.S.P. Plan shall become effective on the
Effective Date subject to the affirmative vote by a majority of the
outstanding shares of Stock of the Company approving the Q.S.P. Plan (which
approval must occur within twelve (12) months before or after the date the
Q.S.P. Plan is adopted by the Board of Directors).
21. NO RIGHTS AS AN EMPLOYEE. Nothing in the Q.S.P. Plan shall be construed
to give any person the right to remain in the employ of the Company or any
Subsidiary Corporation or to affect the Company or any Subsidiary
Corporation's right to terminate the employment of any person at any time with
or without cause.
22. TITLES. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of the Q.S.P. Plan.
23. CONFORMITY TO SECURITIES LAWS. The Plan is intended to conform to the
extent necessary with all provisions of the Securities Act of 1933, as
amended, and the Securities Exchange Act of 1934, as amended, and any and all
regulations and rules promulgated by the Securities and Exchange Commission
thereunder, including without limitation Rule 16b-3. Notwithstanding anything
herein to the contrary, the Plan shall be administered, and Options shall be
granted and may be exercised, only in such a manner as to conform to such
laws, rules and regulations. To the extent permitted by applicable law, the
Q.S.P. Plan and Options granted hereunder shall be deemed amended to the
extent necessary to conform to such laws, rules and regulations.
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