Exhibit 4.1
AMENDED AND RESTATED
2001 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN
OF
THE J. JILL GROUP, INC.
AMENDED AND RESTATED
2001 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN
OF
THE J. JILL GROUP, INC.
TABLE OF CONTENTS
SECTION 1. PURPOSE................................................................................................1
SECTION 2. ADMINISTRATION.........................................................................................1
2.1 THE COMMITTEE...................................................................................1
2.2 POWERS OF THE COMMITTEE.........................................................................1
SECTION 3. STOCK..................................................................................................2
3.1 STOCK TO BE ISSUED..............................................................................2
3.2 EXPIRATION, CANCELLATION OR TERMINATION OF OPTION...............................................2
3.3 LIMITATION ON GRANTS............................................................................2
SECTION 4. ELIGIBILITY............................................................................................2
4.1 PERSONS ELIGIBLE................................................................................2
4.2 GREATER-THAN-TEN-PERCENT STOCKHOLDERS...........................................................3
4.3 MAXIMUM AGGREGATE FAIR MARKET VALUE.............................................................3
4.4 OPTION GRANTS TO ELIGIBLE DIRECTORS.............................................................3
SECTION 5. TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE.........................................................3
5.1 TERMINATION OF EMPLOYMENT.......................................................................3
5.2 DEATH OR RETIREMENT OF OPTIONEE.................................................................4
SECTION 6. TERMS OF THE OPTION AGREEMENTS.........................................................................4
6.1 EXPIRATION OF OPTION............................................................................5
6.2 EXERCISE........................................................................................5
6.3 PURCHASE PRICE..................................................................................5
6.4 TRANSFERABILITY OF OPTIONS......................................................................5
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6.5 RIGHTS OF OPTIONEES.............................................................................5
6.6 REPURCHASE RIGHT................................................................................5
6.7 "LOCKUP" AGREEMENT..............................................................................5
SECTION 7. METHOD OF EXERCISE, PAYMENT OF PURCHASE PRICE..........................................................6
7.1 METHOD OF EXERCISE..............................................................................6
7.2 PAYMENT OF PURCHASE PRICE.......................................................................6
SECTION 8. CHANGES IN COMPANY'S CAPITAL STRUCTURE.................................................................6
8.1 RIGHTS OF COMPANY...............................................................................6
8.2 RECAPITALIZATION, STOCK SPLITS AND DIVIDENDS....................................................6
8.3 MERGER WITHOUT CHANGE OF CONTROL................................................................7
8.4 SALE OR MERGER WITH CHANGE OF CONTROL...........................................................7
8.5 ADJUSTMENTS TO COMMON STOCK SUBJECT TO OPTIONS..................................................7
8.6 MISCELLANEOUS...................................................................................7
SECTION 9. GENERAL RESTRICTION....................................................................................8
9.1 INVESTMENT REPRESENTATIONS......................................................................8
9.2 COMPLIANCE WITH SECURITIES LAWS.................................................................8
9.3 EMPLOYMENT OBLIGATION...........................................................................8
9.4 WITHHOLDING TAX.................................................................................8
SECTION 10. AMENDMENT OR TERMINATION OF THE PLAN..................................................................9
SECTION 11. NONEXCLUSIVITY OF THE PLAN............................................................................9
SECTION 12. EFFECTIVE DATE AND DURATION OF THE PLAN...............................................................9
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AMENDED AND RESTATED
2001 INCENTIVE AND NON-STATUTORY STOCK OPTION PLAN
OF
THE J. JILL GROUP, INC.
SECTION 1. PURPOSE
This 2001 Incentive and Non-Statutory Stock Option Plan (the "Plan") of The
J. Jill Group, Inc. (the "Company"), is designed to provide additional incentive
to executives and other key employees of the Company, and any parent or
subsidiary of the Company, and for certain other individuals providing services
to or acting as directors of the Company or any such parent or subsidiary. The
Company intends that this purpose will be effected by the granting of incentive
stock options ("Incentive Stock Options") as defined in Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and Non-Statutory stock
options ("Non-Statutory Options") under the Plan which afford such executives,
key employees or other individuals an opportunity to acquire or increase their
proprietary interest in the Company through the acquisition of shares of its
Common Stock. The Company intends that Incentive Stock Options issued under the
Plan will qualify as "incentive stock options" as defined in Section 422 of the
Code and the terms of the Plan shall be interpreted in accordance with this
intention. The terms "parent" and "subsidiary" shall have the respective
meanings set forth in Section 424 of the Code.
SECTION 2. ADMINISTRATION
2.1 THE COMMITTEE. The Plan shall be administered by the Compensation
Committee of the Board of Directors (the "Board") or another committee
consisting of at least two members of the Company's Board (in either case, the
"Committee"). None of the members of the Committee shall be an officer or other
employee of the Company. It is the intention of the Company that the members of
the Committee shall each be a "Non-Employee Director" within the meaning of Rule
16b-3 under the Securities Exchange Act of 1934 and an "Outside Director " (as
such term is defined below), but the authority and validity of any act taken or
not taken by the Committee shall not be affected if any person administering the
Plan is not a "Non-Employee Director" or "outside director." Except as
specifically reserved to the Board under the terms of the Plan, the Committee
shall have full and final authority to operate, manage and administer the Plan
on behalf of the Company. Action by the Committee shall require the affirmative
vote of a majority of all members thereof. The term "Outside Director" as used
in the Plan (1) shall mean a director who (i) is not an employee of the Company
or of any "affiliated group," as such term is defined in Section 1504(a) of the
Code, which includes the Company (an "Affiliate"), (ii) is not a former employee
of the Company or any Affiliate who is receiving compensation for prior services
(other than benefits under a tax-qualified retirement plan) during the Company's
or any Affiliate's taxable year, (iii) has not been an officer of the Company or
any Affiliate and (iv) does not receive remuneration from the Company or any
Affiliate, either directly or indirectly, in any capacity other than as a
director, and (2) shall be determined, and amended where necessary, in
accordance with Section 162(m) of the Code and the Treasury regulations issued
thereunder.
2.2 POWERS OF THE COMMITTEE. Subject to the terms and conditions of the
Plan, the Committee shall have the power:
(a) To determine from time to time the persons eligible to receive
options and the options to be granted to such persons under the Plan and to
prescribe the terms, conditions, restrictions, if any, and provisions (which
need not be identical) of each option granted under the Plan to such persons;
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(b) To construe and interpret the Plan and options granted thereunder
and to establish, amend, and revoke rules and regulations for administration of
the Plan. In this connection, the Committee may correct any defect or supply any
omission, or reconcile any inconsistency in the Plan, or in any option
agreement, in the manner and to the extent it shall deem necessary or expedient
to make the Plan fully effective. All decisions and determinations by the
Committee in the exercise of this power shall be final and binding upon the
Company and optionees;
(c) To make, in its sole discretion, changes to any outstanding option
granted under the Plan, including:
(i) to accelerate the vesting schedule; or
(ii) to extend the expiration date;
PROVIDED, however, that the Committee shall not have the power to reprice any
options issued under the Plan, whether by reducing their exercise price or
canceling them and issuing replacement options in their stead.
(d) Generally, to exercise such powers and to perform such acts as are
deemed necessary or expedient to promote the best interests of the Company with
respect to the Plan.
SECTION 3. STOCK
3.1 STOCK TO BE ISSUED. The stock subject to the options granted under the
Plan shall be shares of the Company's authorized but unissued common stock, $.01
par value (the "Common Stock"), or shares of the Company's Common Stock held in
treasury. The total number of shares that may be issued pursuant to options
granted under the Plan shall not exceed an aggregate of 2,250,000 shares of
Common Stock; PROVIDED, however, that the class and aggregate number of shares
which may be subject to options granted under the Plan shall be subject to
adjustment as provided in Section 8 hereof.
3.2 EXPIRATION, CANCELLATION OR TERMINATION OF OPTION. Whenever any
outstanding option under the Plan expires, is cancelled or is otherwise
terminated (other than by exercise), the shares of Common Stock allocable to the
unexercised portion of such option may again be the subject of options under the
Plan.
3.3 LIMITATION ON GRANTS. In no event may any person be granted options
under the Plan in any calendar year to purchase more than 825,000 shares of
Common Stock. The number of shares of Common Stock issuable pursuant to an
option granted under the Plan that is subsequently forfeited, cancelled or
otherwise terminated shall continue to count toward the foregoing limitation in
the calendar year of grant.
SECTION 4. ELIGIBILITY
4.1 PERSONS ELIGIBLE. Incentive Stock Options under the Plan may be granted
only to officers and other employees of the Company or any parent or subsidiary
of the Company. Non-Statutory Options may be granted to officers or other
employees of the Company or any parent or subsidiary of the Company, and to
members of the Board and consultants or other persons who render services to the
Company or any such parent or subsidiary (regardless of whether they are also
employees), PROVIDED, however, that options may be granted to members of the
Board who are not employees of the Company or any such parent or subsidiary
("Eligible Directors") only as provided in Section 4.4.
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4.2 GREATER-THAN-TEN-PERCENT STOCKHOLDERS. Except as may otherwise be
permitted by the Code or other applicable law or regulation, no Incentive Stock
Option shall be granted to an individual who, at the time the option is granted,
owns (including ownership attributed pursuant to Section 425 of the Code) more
than ten percent of the total combined voting power of all classes of stock of
the Company or any parent or subsidiary (a "greater-than-ten-percent
stockholder"), unless such Incentive Stock Option provides that (i) the purchase
price per share shall not be less than one hundred ten percent of the fair
market value of the Common Stock at the time such option is granted, and (ii)
that such option shall not be exercisable to any extent after the expiration of
five years from the date it is granted.
4.3 MAXIMUM AGGREGATE FAIR MARKET VALUE. The aggregate fair market value
(determined at the time the option is granted) of the Common Stock with respect
to which Incentive Stock Options are exercisable for the first time by any
optionee during any calendar year (under the Plan and any other plans of the
Company or any parent or subsidiary for the issuance of incentive stock options)
shall not exceed $100,000 (or such greater amount as may from time to time be
permitted with respect to incentive stock options by the Code or any other
applicable law or regulation).
4.4 OPTION GRANTS TO ELIGIBLE DIRECTORS.
(a) RELATION TO PRIOR PLANS. After the date of the meeting of
stockholders at which this Plan is approved, the provisions of this Section 4.4
shall supersede those of Section 4.4 of the Company's Amended and Restated 1993
Incentive and Non-Qualified Stock Option Plan.
(b) GRANT OF OPTIONS.
(i) On the date each new Eligible Director first joins the Board,
such Eligible Director shall automatically be granted a Non-Statutory Option to
purchase 30,000 shares of Common Stock. Such Non-Statutory Option shall be
immediately vested in full unless otherwise determined by the Committee prior to
the grant of such Non-Statutory Option.
(ii) On the date of each annual meeting of the Company's
stockholders or special meeting in lieu thereof, each Eligible Director who has
served for at least six months and continues to serve at that meeting shall
automatically be granted a Non-Statutory Option to purchase 11,250 shares of
Common Stock. Such Non-Statutory Option shall be immediately vested in full.
(c) PURCHASE PRICE. The purchase price per share of Common Stock under
each Non-Statutory Option granted pursuant to this Section 4.4 shall be equal to
the fair market value of the Common Stock on the date the Non-Statutory Option
is granted, such fair market value to be determined in accordance with the
provisions of Section 6.3.
(d) EXPIRATION. Each Non-Statutory Option granted to an Eligible
Director under this Section 4.4 shall expire on the tenth anniversary of the
date of grant.
SECTION 5. TERMINATION OF EMPLOYMENT OR DEATH OF OPTIONEE
5.1 TERMINATION OF EMPLOYMENT. Except as may be otherwise expressly
provided herein, options shall terminate on the earlier of:
(a) the date of expiration thereof;
(b) immediately upon the termination of the optionee's employment with
or performance of services for the Company (or any parent or subsidiary of the
Company) by the Company (or any such
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parent or subsidiary) for cause (as determined by the Company or such parent or
subsidiary); or
(c) thirty days after the date of termination of the optionee's
employment with or performance of services for the Company (or any parent or
subsidiary of the Company) by the Company (or any such parent or subsidiary)
without cause or voluntarily by the optionee;
PROVIDED, that Non-Statutory Options granted to persons who are not employees of
the Company (or any parent or subsidiary of the Company) need not, unless the
Committee determines otherwise, be subject to the provisions set forth in
clauses (b) and (c) above.
An employment relationship between the Company (or any parent or subsidiary
of the Company) and the optionee shall be deemed to exist during any period in
which the optionee is employed by the Company (or any such parent or
subsidiary). Whether authorized leave of absence, or absence on military or
government service, shall constitute termination of the employment relationship
between the Company (or any parent or subsidiary of the Company) and the
optionee shall be determined by the Committee at the time thereof. As used
herein, "cause" shall mean (x) any material breach by the optionee of any
agreement to which the optionee and the Company (or any parent or subsidiary of
the Company) are both parties, (y) any act or omission to act by the optionee
which may have a material and adverse effect on the business of the Company (or
any such parent or subsidiary) or on the optionee's ability to perform services
for the Company (or any such parent or subsidiary), including, without
limitation, the commission of any crime (other than ordinary traffic
violations), or (z) any material misconduct or material neglect of duties by the
optionee in connection with the business or affairs of the Company (or any such
parent or subsidiary) or any affiliate of the Company (or any such parent or
subsidiary).
5.2 DEATH OR RETIREMENT OF OPTIONEE. In the event of the death of the
holder of an option that is subject to clause (b) or (c) of Section 5.1 above
prior to termination of the optionee's employment with or performance of
services for the Company (or any parent or subsidiary of the Company) and before
the date of expiration of such option, such option shall terminate on the
earlier of such date of expiration or one year following the date of such death.
After the death of the optionee, his executors, administrators or any person or
persons to whom his option may be transferred by will or by the laws of descent
and distribution, shall have the right, at any time prior to such termination,
to exercise the option to the extent the optionee was entitled to exercise such
option at the time of his death.
If, before the date of the expiration of an option that is subject to
clause (b) or (c) of Section 5.1 above, the optionee shall be retired in good
standing from the Company for reasons of age or disability under the then
established rules of the Company, the option shall terminate on the earlier of
such date of expiration or ninety (90) days after the date of such retirement.
In the event of such retirement, the optionee shall have the right prior to the
termination of such option to exercise the option to the extent to which he was
entitled to exercise such option immediately prior to such retirement.
SECTION 6. TERMS OF THE OPTION AGREEMENTS
Each option agreement shall be in writing and shall contain such terms,
conditions, restrictions, if any, and provisions as the Committee shall from
time to time deem appropriate. Such provisions or conditions may include without
limitation restrictions on transfer, repurchase rights, or such other provisions
as shall be determined by the Committee; PROVIDED that such additional
provisions shall not be inconsistent with any other term or condition of the
Plan and such additional provisions shall not cause any Incentive Stock Option
granted under the Plan to fail to qualify as an incentive option within the
meaning of Section 422 of the Code. The shares of stock issuable upon exercise
of an option by any executive officer, director or beneficial owner of more than
ten percent of the Common Stock of the
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Company may not be sold or transferred (except that such shares may be issued
upon exercise of such option) by such officer, director or beneficial owner for
a period of six months following the grant of such option.
Option agreements need not be identical, but each option agreement by
appropriate language shall include the substance of all of the following
provisions:
6.1 EXPIRATION OF OPTION. Notwithstanding any other provision of the Plan
or of any option agreement, each option shall expire on the date specified in
the option agreement, which date shall not, in the case of an Incentive Stock
Option, be later than the tenth anniversary (fifth anniversary in the case of a
greater-than-ten-percent stockholder) of the date on which the option was
granted, or as specified in Section 5 of this Plan.
6.2 EXERCISE. Each option may be exercised, so long as it is valid and
outstanding, from time to time in part or as a whole, subject to any limitations
with respect to the number of shares for which the option may be exercised at a
particular time and to such other conditions as the Committee in its discretion
may specify upon granting the option.
6.3 PURCHASE PRICE. The purchase price per share under each option shall be
determined by the Committee at the time the option is granted; PROVIDED,
however, that the option price of any option shall not, unless otherwise
permitted by the Code or other applicable law or regulation, be less than the
fair market value of the Common Stock on the date the option is granted (110% of
the fair market value in the case of the grant of an Incentive Stock Option to a
greater-than-ten-percent stockholder). For the purpose of the Plan the fair
market value of the Common Stock shall be the closing price per share on the
date of grant of the option as reported by a nationally recognized stock
exchange, or, if the Common Stock is not listed on such an exchange, as reported
by the National Association of Securities Dealers Automated Quotation System
("Nasdaq") National Market System or, if the Common Stock is not listed on the
Nasdaq National Market System, the mean of the bid and asked prices per share on
the date of grant of the option or, if the Common Stock is not traded over the
counter, the fair market value as determined by the Committee.
6.4 TRANSFERABILITY OF OPTIONS. Options shall not be transferable by the
optionee otherwise than by will or under the laws of descent and distribution,
and shall be exercisable, during his lifetime, only by him/her.
6.5 RIGHTS OF OPTIONEES. No optionee shall be deemed for any purpose to be
the owner of any shares of Common Stock subject to any option unless and until
the option shall have been exercised pursuant to the terms thereof, and the
Company shall have issued and delivered the shares to the optionee.
6.6 REPURCHASE RIGHT. The Committee may in its discretion provide upon the
grant of any option hereunder that the Company shall have an option to
repurchase upon such terms and conditions as determined by the Committee all or
any number of shares purchased upon exercise of such option. The repurchase
price per share payable by the Company shall be such amount or be determined by
such formula as is fixed by the Committee at the time the option for the shares
subject to repurchase is granted. In the event the Committee shall grant options
subject to the Company's repurchase option, the certificates representing the
shares purchased pursuant to such option shall carry a legend satisfactory to
counsel for the Company referring to the Company's repurchase option.
6.7 "LOCKUP" AGREEMENT. The Committee may in its discretion specify upon
granting an option that the optionee shall agree for a period of time (not to
exceed 180 days) from the effective date
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of any registration of securities of the Company (upon request of the Company or
the underwriters managing any underwritten offering of the Company's
securities), not to sell, make any short sale of, loan, grant any option for the
purchase of, or otherwise dispose of any shares issued pursuant to the exercise
of such option, without the prior written consent of the Company or such
underwriters, as the case may be.
SECTION 7. METHOD OF EXERCISE, PAYMENT OF PURCHASE PRICE
7.1 METHOD OF EXERCISE. Any option granted under the Plan may be exercised
by the optionee by delivering to the Company on any business day a written
notice specifying the number of shares of Common Stock the optionee then desires
to purchase and specifying the address to which the certificates for such shares
are to be mailed (the "Notice"), accompanied by payment for such shares.
7.2 PAYMENT OF PURCHASE PRICE. Payment for the shares of Common Stock
purchased pursuant to the exercise of an option shall be made by one or more of
the following methods: (i) in cash, by certified or bank check or other
instrument acceptable to the Committee; (ii) by the optionee delivering to the
Company a properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company cash or a check
payable and acceptable to the Company to pay the purchase price; PROVIDED that
in the event the optionee chooses to pay the purchase price as so provided, the
optionee and the broker shall comply with such procedures and enter into such
agreements of indemnity and other agreements as the Committee shall prescribe as
a condition of such payment procedure; and PROVIDED FURTHER that the Company
need not act upon such exercise notice until the Company receives full payment
of the exercise price; or (iii) by any other means (including, without
limitation, by delivery of a promissory note of the optionee payable on such
terms as are specified by the Committee; PROVIDED, however, that the interest
rate borne by such note shall not be less than the lowest applicable federal
rate, as defined in Section 1247(d) of the Code) which the Committee determines
are consistent with the purpose of the Plan and with applicable laws and
regulations. As promptly as practicable after receipt of the Notice and
accompanying payment, the Company shall deliver to the optionee certificates for
the number of shares with respect to which such option has been so exercised,
issued in the optionee's name; PROVIDED, however, that such delivery shall be
deemed effected for all purposes when the Company or a stock transfer agent of
the Company shall have deposited such certificates in the United States mail,
addressed to the optionee, at the address specified in the Notice.
SECTION 8. CHANGES IN COMPANY'S CAPITAL STRUCTURE
8.1 RIGHTS OF COMPANY. The existence of outstanding options shall not
affect in any way the right or power of the Company or its stockholders to make
or authorize, without limitation, any or all adjustments, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business, or any merger or consolidation of the Company, or any issue of Common
Stock, or any issue of bonds, debentures, preferred or prior preference stock or
other capital stock ahead of or affecting the Common Stock or the rights
thereof, or the dissolution or liquidation of the Company, or any sale or
transfer of all or any part of its assets or business, or any other corporate
act or proceeding, whether of a similar character or otherwise.
8.2 RECAPITALIZATION, STOCK SPLITS AND DIVIDENDS. If the Company shall
effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a stock dividend, or other increase or reduction of the number of
shares of the Common Stock outstanding, in any such case without receiving
compensation therefor in money, services or property, then (i) the number,
class, and price per share of shares of stock subject to outstanding options
hereunder shall automatically be appropriately adjusted in such a manner as to
entitle an optionee to receive upon exercise of an option, for the same
aggregate cash consideration, the same total number and class of shares as he
would have received as a
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result of the event requiring the adjustment had he exercised his option in full
immediately prior to such event; and (ii) the number and class of shares set
forth in Sections 3.1, 3.3 and 4.4 shall be adjusted by substituting therefor
that number and class of shares of stock that the owner of an equal number of
outstanding shares of Common Stock would own as the result of the event
requiring the adjustment. The number of shares set forth in Sections 3.1, 3.3
and 4.4 have been so adjusted to reflect the 3-for-2 stock split in the form of
a stock dividend that was paid on June 28, 2002 and, notwithstanding the
foregoing provisions, there shall be no further adjustments to such numbers to
reflect such stock split.
8.3 MERGER WITHOUT CHANGE OF CONTROL. After a merger of one or more
corporations into the Company, or after a consolidation of the Company and one
or more corporations in which (i) the Company shall be the surviving
corporation, and (ii) the stockholders of the Company immediately prior to such
merger or consolidation own after such merger or consolidation shares
representing at least fifty percent of the voting power of the Company, each
holder of an outstanding option shall, at no additional cost, be entitled upon
exercise of such option to receive in lieu of the number of shares as to which
such option shall then be so exercisable, the number and class of shares of
stock or other securities to which such holder would have been entitled pursuant
to the terms of the agreement of merger or consolidation if, immediately prior
to such merger or consolidation, such holder had been the holder of record of a
number of shares of Common Stock equal to the number of shares for which such
option was exercisable.
8.4 SALE OR MERGER WITH CHANGE OF CONTROL. If the Company is merged into or
consolidated with another corporation under circumstances where the Company is
not the surviving corporation, or if there is a merger or consolidation where
the Company is the surviving corporation but the stockholders of the Company
immediately prior to such merger or consolidation do not own after such merger
or consolidation shares representing at least fifty percent of the voting power
of the Company, or if the Company is liquidated, or sells or otherwise disposes
of substantially all of its assets to another corporation while unexercised
options remain outstanding under the Plan, (i) subject to the provisions of
clause (iii) below, after the effective date of such merger, consolidation,
liquidation, sale or disposition, as the case may be, each holder of an
outstanding option shall be entitled, upon exercise of such option, to receive,
in lieu of shares of Common Stock, shares of such stock or other securities,
cash or property as the holders of shares of Common Stock received pursuant to
the terms of the merger, consolidation, liquidation, sale or disposition; (ii)
the Committee may accelerate the time for exercise of all unexercised and
unexpired options to and after a date prior to the effective date of such
merger, consolidation, liquidation, sale or disposition, as the case may be,
specified by the Committee; or (iii) all outstanding options may be cancelled by
the Committee as of the effective date of any such merger, consolidation,
liquidation, sale or disposition, PROVIDED that (x) notice of such cancellation
shall be given to each holder of an option and (y) each holder of an option
shall have the right to exercise such option to the extent that the same is then
exercisable or, if the Committee shall have accelerated the time for exercise of
all unexercised and unexpired options, in full during the 30-day period
preceding the effective date of such merger, consolidation, liquidation, sale or
disposition.
8.5 ADJUSTMENTS TO COMMON STOCK SUBJECT TO OPTIONS. Except as hereinbefore
expressly provided, the issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or property,
or for labor or services, either upon direct sale or upon the exercise of rights
or warrants to subscribe therefor, or upon conversion of shares or obligations
of the Company convertible into such shares or other securities, shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of shares of Common Stock then subject to outstanding options.
8.6 MISCELLANEOUS. Adjustments under this Section 8 shall be determined by
the Committee, and
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such determinations shall be conclusive. No fractional shares of Common Stock
shall be issued under the Plan on account of any adjustment specified above.
SECTION 9. GENERAL RESTRICTION
9.1 INVESTMENT REPRESENTATIONS. The Company may require any person to whom
an option is granted, as a condition of exercising such option, to give written
assurances in substance and form satisfactory to the Company to the effect that
such person is acquiring the Common Stock subject to the option for his own
account for investment and not with any present intention of selling or
otherwise distributing the same, and to such other effects as the Company deems
necessary or appropriate in order to comply with federal and applicable state
securities laws.
9.2 COMPLIANCE WITH SECURITIES LAWS. The Company shall not be required to
sell or issue any shares under any option if the issuance of such shares shall
constitute a violation by the optionee or by the Company of any provisions of
any law or regulation of any governmental authority. In addition, in connection
with the Securities Act of 1933, as now in effect or hereafter amended (the
"Act"), upon exercise of any option, the Company shall not be required to issue
such shares unless the Committee has received evidence satisfactory to it to the
effect that the holder of such option will not transfer such shares except
pursuant to a registration statement in effect under such Act or unless an
opinion of counsel satisfactory to the Company has been received by the Company
to the effect that such registration is not required. Any determination in this
connection by the Committee shall be final, binding and conclusive. In the event
the shares issuable on exercise of an option are not registered under the Act,
the Company may imprint upon any certificate representing shares so issued the
following legend or any other legend which counsel for the Company considers
necessary or advisable to comply with the Act and with applicable state
securities laws:
The shares of stock represented by this certificate have not been
registered under the Securities Act of 1933 or under the securities laws of
any State and may not be sold or transferred except upon such registration
or upon receipt by the Corporation of an opinion of counsel satisfactory to
the Corporation, in form and substance satisfactory to the Corporation,
that registration is not required for such sale or transfer.
The Company may, but shall in no event be obligated to, register any
securities covered hereby pursuant to the Act; and in the event any shares are
so registered the Company may remove any legend on certificates representing
such shares. The Company shall not be obligated to take any other affirmative
action in order to cause the exercise of an option or the issuance of shares
pursuant thereto to comply with any law or regulation of any governmental
authority.
9.3 EMPLOYMENT OBLIGATION. The granting of any option shall not impose upon
the Company (or any parent or subsidiary of the Company) any obligation to
employ or continue to employ any optionee; and the right of the Company (or any
such parent or subsidiary) to terminate the employment of any officer or other
employee shall not be diminished or affected by reason of the fact that an
option has been granted to him/her.
9.4 WITHHOLDING TAX. Whenever under the Plan shares of Common Stock are to
be delivered upon exercise of an option, the Company shall be entitled to
require as a condition of delivery that the optionee remit an amount sufficient
to satisfy all federal, state and other governmental withholding tax
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requirements related thereto.
SECTION 10. AMENDMENT OR TERMINATION OF THE PLAN
The Board of Directors may modify, revise or terminate this Plan at any
time and from time to time, except that (i) the class of persons eligible to
receive options and the aggregate number of shares issuable pursuant to this
Plan shall not be changed or increased, other than by operation of Section 8
hereof, without the consent of the stockholders of the Company, other than to
comport with changes in the Code, the Employee Retirement Income Security Act,
or the rules thereunder.
SECTION 11. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan by the Board of Directors nor the
submission of the Plan to the stockholders of the Company for approval shall be
construed as creating any limitations on the power of the Board of Directors to
adopt such other incentive arrangements as it may deem desirable, including,
without limitation, the granting of stock options otherwise than under the Plan,
and such arrangements may be either applicable generally or only in specific
cases.
SECTION 12. EFFECTIVE DATE AND DURATION OF THE PLAN
The Plan shall become effective upon its adoption by the Board of
Directors, PROVIDED that the stockholders of the Company shall have approved the
Plan within twelve months prior to or following the adoption of the Plan by the
Board. No option may be granted under the Plan after the tenth anniversary of
the effective date. The Plan shall terminate (i) when the total amount of Common
Stock with respect to which options may be granted shall have been issued upon
the exercise of options or (ii) by action of the Board of Directors pursuant to
Section 10 hereof, whichever shall first occur.
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