Exhibit 10.22
DEC INTERNATIONAL INC.
1996 STOCK OPTION PLAN
1. PURPOSES. The purposes of the DEC International Inc. 1996 Stock
Option Plan are:
(a) To further the growth, development and success of the Company and its
Subsidiaries by enabling the executive and other key salaried employees of, and
consultants to, the Company and its Subsidiaries to acquire a continuing equity
interest in the Company, thereby increasing their personal interests in such
growth, development and success and motivating such employees and consultants to
exert their best efforts on behalf of the Company and its Subsidiaries; and
(b) To maintain the ability of the Company and its Subsidiaries to attract
and retain employees and consultants of outstanding ability by offering them an
opportunity to acquire a continuing equity interest in the Company and its
Subsidiaries which will reflect the growth, development and success of the
Company and its Subsidiaries.
Toward these objectives, the Committee may grant Options to such employees and
consultants, all pursuant to the terms and conditions of the Plan.
2. DEFINITIONS. As used in the Plan, the following capitalized terms
shall have the meanings set forth below:
(a) "AGREEMENT" - an option agreement evidencing an Option.
(b) "BOARD" - the Board of Directors of the Company.
(c) "CODE" - the Internal Revenue Code of 1986, as it may be amended from
time to time, including regulations and rules thereunder and successor
provisions and regulations and rules thereto.
(d) "COMMITTEE" - the Compensation Committee of the Board, or such other
Board committee as may be designated by the Board to administer the Plan.
(e) "COMPANY" - DEC International Inc., a Delaware corporation, or any
successor entity.
(f) "FAIR MARKET VALUE" of a share of Stock as of a given date shall be (i)
the average of the closing representative bid and asked prices for the Stock on
such date as reported by NASDAQ or, if no such prices are reported for such
date, the most recent day for which such prices are available shall be used;
PROVIDED, HOWEVER, that if NASDAQ is not then in existence, its successor
quotation system shall be used or (ii) if the Stock is not then publicly traded,
the fair market value determined by such other reasonable valuation method as
the Committee shall, in its discretion, select and apply in good faith as of the
given date; PROVIDED, HOWEVER, that for purposes of paragraphs (a) and (g) of
Section 6, such fair market value shall be determined subject to Section
422(c)(7) of the Code.
(g) "ISO" or "INCENTIVE STOCK OPTION" - an option to purchase Stock granted
to a Participant under the Plan in accordance with the terms and conditions set
forth in Section 6 and which conforms to the applicable provisions of Section
422 of the Code.
(h) "NASDAQ" - the National Association of Securities Dealers Automated
Quotation System.
(i) "NOTICE" - written notice actually received by the Company at its
offices on the day of such receipt, if received on or before 1:30 p.m., on a day
when the Company's offices are open for business, or, if received after such
time, such notice shall be deemed received on the next such day, which notice
may be delivered in person to the Company's Chief Financial Officer or sent by
facsimile to the Company, or sent by certified or registered mail or overnight
courier, prepaid, addressed to the Company at DEC International Inc., 5775
Peachtree Dunwoody Rd., Suite C-150, Atlanta, Georgia 30342, Attention: Chief
Financial Officer.
(j) "OPTION" - an option to purchase Stock granted to a Participant under
the Plan in accordance with the terms and conditions set forth in Section 6.
Options may be either ISOs or stock options other than ISOs.
(k) "OPTIONEE" - a Participant who has been granted an Option under the
Plan in accordance with the terms and conditions set forth in Section 6.
(l) "PARTICIPANT" - an individual eligible, pursuant to Section 5, to
participate in the Plan who is selected to participate in the Plan pursuant to
Section 3.
(m) "PLAN" - this DEC International Inc. 1996 Stock Option Plan.
-2-
(n) "SECURITIES ACT" - the Securities Act of 1933, as it may be amended
from time to time, including regulations and rules thereunder and successor
provisions and regulations and rules thereto.
(o) "STOCK" - the $0.0001 par value common stock of the Company.
(p) "SUBSIDIARY" shall mean (i) any present or future corporation which is
or would be a "subsidiary corporation" of the Company as the term is defined in
Section 424(f) of the Code and (ii) any unincorporated entity in which the
Company and/or one or more of its "subsidiary corporations" (as defined in
Section 424(f) of the Code) presently or in the future own an aggregate profits
interest of fifty percent (50%) or more, which the Committee in its discretion
determines will be a "Subsidiary" for purposes of the Plan.
3. ADMINISTRATION OF THE PLAN. (a) The Committee shall have exclusive
authority to operate, manage and administer the Plan in accordance with its
terms and conditions. Notwithstanding the foregoing, in its absolute
discretion, the Board may at any time and from time to time exercise any and all
rights, duties and responsibilities of the Committee under the Plan, including,
but not limited to, establishing procedures to be followed by the Committee.
(b) The Committee shall be appointed from time to time by the Board,
and the Committee shall consist of not less than three (3) members of the Board.
Appointment of Committee members shall be effective upon their acceptance of
such appointment. Committee members may be removed by the Board at any time
either with or without cause, and such members may resign at any time by
delivering notice thereof to the Board. Any vacancy on the Committee, whether
due to action of the Board or any other reason, shall be filled by the Board.
(c) The Committee shall have all authority that may be necessary or
helpful to enable it to discharge its responsibilities with respect to the Plan.
Without limiting the generality of the foregoing sentence or paragraph (a) of
this Section 3, the Committee shall have the exclusive right and discretionary
authority to: (i) interpret the Plan and the Agreements; (ii) construe any
ambiguous provision of the Plan and/or the Agreements; (iii) determine
eligibility for participation in the Plan; (iv) decide all questions concerning
eligibility for and the amount of Options granted under the Plan; (v) select,
from time to time, from amongst those eligible, the employees and consultants to
whom Options shall be granted under the Plan, which selection may be based upon
information furnished to the Committee by the Company's management; (vi)
determine whether an Option shall take the form of an ISO or Option other than
an ISO; (vii) determine the number of shares of Stock to be included in any
Option or
-3-
to which any Option shall otherwise relate and the periods for which Options
will be outstanding; (viii) establish, amend, waive and/or rescind rules and
regulations and administrative guidelines for carrying out the Plan; (ix) to the
extent permitted under the Plan and the applicable Agreement, grant waivers of
Plan terms, conditions, restrictions and limitations; (x) to the extent
permitted under the Plan and the applicable Agreement, permit the transfer of an
Option or the exercise of an Option by one other than the Participant who
received the grant of such Option; (xi) correct any errors, supply any omissions
or reconcile any inconsistencies in the Plan and/or any Agreement or any other
instrument relating to any Option; (xii) to the extent permitted by the Plan,
amend or adjust the terms and conditions of any outstanding Option and/or adjust
the number and/or class of shares of Stock subject to any outstanding Option;
(xiii) in accordance with the Plan, establish and administer any performance
goals in connection with any Options; (xiv) at any time and from time to time
after the granting of an Option, specify such additional terms, conditions and
restrictions with respect to any such Option as may be deemed necessary or
appropriate to ensure compliance with any and all applicable laws, including,
but not limited to, (A) terms, restrictions and conditions for compliance with
Federal and state securities laws, (B) methods of withholding or providing for
the payment of required taxes and (C) restrictions regarding a Participant's
ability to exercise Options under a "cashless exercise" program established by
the Committee; and (xv) take any and all such other action it deems necessary or
advisable for the proper operation and/or administration of the Plan. The
Committee shall have full discretionary authority in all matters related to the
discharge of its responsibilities and the exercise of its authority under the
Plan. Decisions and actions by the Committee with respect to the Plan and any
Agreement shall be final, conclusive and binding on all persons having or
claiming to have any right or interest in or under the Plan and/or any
Agreement. Options need not be uniform as to all grants and recipients thereof.
(d) Each Option shall be evidenced by an Agreement, which shall be
executed by the Company and the Participant to whom such Option has been
granted, unless the Agreement provides otherwise; HOWEVER, two or more Options
to a single Participant may be combined in a single Agreement. An Agreement
shall not be a precondition to the granting of an Option; HOWEVER, no person
shall have any rights under any Option unless and until the Participant to whom
the Option shall have been granted (i) shall have executed and delivered to the
Company an Agreement or other instrument evidencing the Option, unless such
Agreement provides otherwise, and (ii) has otherwise complied with the
applicable terms and conditions of the Option. The Committee shall prescribe
the form of all Agreements, and, subject to the terms and conditions of the
Plan, shall determine the content of all Agreements. Any Agreement may be
supplemented or amended in writing from time to time as approved by the
-4-
Committee; PROVIDED that the terms and conditions of any such Agreement as
supplemented or amended are not inconsistent with the provisions of the Plan.
(e) A majority of the members of the entire Committee shall constitute
a quorum and the actions of a majority of the members of the Committee in
attendance at a meeting at which a quorum is present, or actions by a written
instrument signed by all members of the Committee, shall be the actions of the
Committee.
(f) The Committee may consult with counsel who may be counsel to the
Company. The Committee may, with the approval of the Board, employ such other
attorneys or consultants, accountants, appraisers, brokers or other persons as
it deems necessary or appropriate. In accordance with Section 12, the Committee
shall not incur any liability for any action taken in good faith in reliance
upon the advice of such counsel or such other persons.
(g) In serving on the Committee, the members thereof shall be entitled
to indemnification as directors of the Company, and to any limitation of
liability and reimbursement as directors with respect to their services as
members of the Committee.
(h) The Committee may, in its discretion, delegate to appropriate
officers of the Company the "administration" of the Plan under this Section 3;
PROVIDED, HOWEVER, that no such delegation by the Committee shall be made (i) if
such delegation would not be permitted under applicable law or (ii) with respect
to the administration of the Plan as it affects executive officers and directors
of the Company, and, PROVIDED FURTHER, HOWEVER, the Committee may not delegate
its authority to correct errors, omissions or inconsistencies in the Plan. All
authority delegated by the Committee under this paragraph (h) of Section 3 shall
be exercised in accordance with the terms and conditions of the Plan and any
rules, regulations or administrative guidelines that may from time to time be
established by the Committee.
4. SHARES OF STOCK SUBJECT TO THE PLAN. (a) The shares of stock subject
to Options granted under the Plan shall be shares of Stock. Such shares of
Stock subject to the Plan may be either authorized and unissued shares (which
will not be subject to preemptive rights) or previously issued shares acquired
by the Company or any Subsidiary. The total number of shares of Stock that may
be delivered pursuant to Options granted under the Plan is 248,857.
(b) Notwithstanding any of the foregoing limitations set forth in this
Section 4, the numbers of shares of Stock specified in this Section 4 shall be
adjusted as provided in Section 10.
-5-
(c) Any shares of Stock subject to an Option which for any reason
expires or is terminated without having been fully exercised may again be
granted pursuant to an Option under the Plan, subject to the limitations of this
Section 4; PROVIDED, HOWEVER, that forfeited shares of Stock shall not be
available for further Options if the recipient thereof has realized any benefits
of ownership from such shares.
5. ELIGIBILITY. Executive and other key salaried employees, including
officers, of the Company and its Subsidiaries (but excluding members of the
Committee as well as non-employee directors) and consultants shall be eligible
to become Participants and receive Options under the Plan.
6. TERMS AND CONDITIONS OF STOCK OPTIONS. All Options to purchase Stock
granted under the Plan shall be either ISOs or Options other than ISOs. Each
Option shall be subject to all the applicable provisions of the Plan, including
the following terms and conditions, and to such other terms and conditions not
inconsistent therewith as the Committee shall determine and which are set forth
in the applicable Agreement.
(a) The option exercise price per share of shares of Stock subject to
each Option shall be determined by the Committee and stated in the
Agreement; PROVIDED, HOWEVER, that, with respect to ISOs, subject to
paragraph (g)(C) of this Section 6, such price shall not be less than 100%
of the Fair Market Value of a share of Stock at the time that the Option is
granted.
(b) Each Option shall be exercisable in whole or in such
installments, at such times and under such conditions as may be determined
by the Committee in its discretion and stated in the Agreement, and, in any
event, over a period of time ending not later than ten (10) years from the
date such Option was granted, subject to paragraph (g)(C) of this Section
6.
(c) An Option shall not be exercisable with respect to a fractional
share of Stock or the lesser of fifty (50) shares or the full number of
shares of Stock then subject to the Option. No fractional shares of Stock
shall be issued upon the exercise of an Option.
(d) Each Option may be exercised by giving Notice to the Company
specifying the number of shares of Stock to be purchased, which shall be
accompanied by payment in full including applicable taxes, if any, in
accordance with Section 9. Payment shall be in any manner permitted by
applicable law and prescribed by the Committee, in its discretion, and set
forth in the Agreement, including, in the Committee's discretion, payment
in accordance with a "cashless exercise" program established by the
Committee.
-6-
(e) No Optionee or other person shall become the beneficial owner of
any shares of Stock subject to an Option, nor have any rights to dividends
or other rights of a shareholder with respect to any such shares until he
or she has exercised his or her Option in accordance with the provisions of
the Plan and the applicable Agreement.
(f) An Option may be exercised only if at all times during the period
beginning with the date of the granting of the Option and ending on the
date of such exercise, the Optionee was an employee or consultant of either
the Company or of a Subsidiary or of another corporation referred to in
Section 421(a)(2) of the Code. Notwithstanding the preceding sentence, the
Committee may determine in its discretion that an Option may be exercised
following termination of such continuous employment or consultancy, whether
or not exercisable at such time, to the extent provided in the applicable
Agreement.
(g)(A) Each Agreement relating to an Option shall state whether such
Option will or will not be treated as an ISO. No ISO shall be granted
unless such Option, when granted, qualifies as an "incentive stock option"
under Section 422 of the Code. Any ISO granted under the Plan shall
contain such terms and conditions, consistent with the Plan, as the
Committee may determine to be necessary to qualify such Option as an
"incentive stock option" under Section 422 of the Code. Any ISO granted
under the Plan may be modified by the Committee to disqualify such Option
from treatment as an "incentive stock option" under Section 422 of the
Code.
(B) Notwithstanding any intent to grant ISOs, an Option granted
under the Plan will not be considered an ISO to the extent that it,
together with any other "incentive stock options" (within the meaning of
Section 422 of the Code, but without regard to subsection (d) of such
Section) under the Plan or any other "incentive stock option" plans of the
Company and any Subsidiary, are exercisable for the first time by any
Optionee during any calendar year with respect to Stock having an aggregate
Fair Market Value in excess of $100,000 (or such other limit as may be
required by the Code) as of the time the Option with respect to such Stock
is granted. The rule set forth in the preceding sentence shall be applied
by taking Options into account in the order in which they were granted.
(C) No ISO shall be granted to a Participant who owns (within the
meaning of Section 424(d) of the Code), at the time the Option is granted,
more than ten percent (10%) of the total combined voting power of all
classes of stock of the Company or a Subsidiary. This restriction does not
apply if at
-7-
the time such ISO is granted the Option exercise price per share of
Stock subject to the Option is at least 110% of the Fair Market Value
of a share of Stock on the date such ISO is granted, and the ISO by
its terms is not exercisable after the expiration of five (5) years
from such date of grant.
(h) An Option and any shares of Stock received upon the exercise of an
Option shall be subject to such other transfer and/or ownership
restrictions and/or legending requirements as the Committee may establish
in its discretion and which are specified in the Agreement and may be
referred to on the certificates evidencing such shares. The Committee may
require an Optionee to give prompt Notice to the Company concerning any
disposition of shares of Stock received upon the exercise of an ISO within:
(i) two (2) years from the date of granting such ISO to such Optionee or
(ii) one (1) year from the transfer of such shares to such Optionee or
(iii) such other period as the Committee may from time to time determine.
The Committee may direct that an Optionee with respect to an ISO undertake
in the applicable Agreement to give such notice described in the preceding
sentence, at such time and containing such information as the Committee may
prescribe, and/or that the certificates evidencing shares acquired by
exercise of an ISO refer to such requirement to give such notice.
7. TRANSFER, LEAVE OF ABSENCE. For purposes of the Plan, a transfer of
an employee from the Company to a Subsidiary or an affiliate of the Company,
whether or not incorporated, or vice versa, or from one Subsidiary or affiliate
of the Company to another, and a leave of absence, duly authorized in writing by
the Company or a Subsidiary or affiliate of the Company, shall not be deemed a
termination of employment of the employee.
8. RIGHTS OF EMPLOYEES AND OTHER PERSONS. (a) No person shall have any
rights or claims under the Plan except in accordance with the provisions of the
Plan and the applicable Agreement.
(b) Nothing contained in the Plan or in any Agreement shall be deemed
to (i) give any employee the right to be retained in the service of the Company
or its Subsidiaries nor restrict in any way the right of the Company or any
Subsidiary to terminate any employee's employment at any time with or without
cause or (ii) confer on any consultant any right of continued relationship with
the Company or its Subsidiaries, or alter any relationship between them,
including any right of the Company or a Subsidiary to terminate its relationship
with such consultant.
-8-
(c) The adoption of the Plan shall not be deemed to give any employee
of the Company or any Subsidiary or any other person any right to be selected as
a Participant or to be granted an Option.
(d) Nothing contained in the Plan or in any Agreement shall be deemed
to give any employee the right to receive any bonus, whether payable in cash or
in Stock, or in any combination thereof, from the Company or any Subsidiary, nor
be construed as limiting in any way the right of the Company or any Subsidiary
to determine, in its sole discretion, whether or not it shall pay any employee
bonuses, and, if so paid, the amount thereof and the manner of such payment.
9. TAX WITHHOLDING OBLIGATIONS. (a) The Company and/or any Subsidiary
are authorized to take whatever actions are necessary and proper to satisfy all
obligations of Participants for the payment of all Federal, state, local and
foreign taxes in connection with any Options (including, but not limited to,
actions pursuant to the following paragraph (b) of this Section 9).
(b) Each Participant shall (and in no event shall Stock be delivered
to such Participant with respect to an Option until), no later than the date as
of which the value of the Option first becomes includible in the gross income of
the Participant for income tax purposes, pay to the Company in cash, or make
arrangements satisfactory to the Company, as determined in the Committee's
discretion, regarding payment to the Company of, any taxes of any kind required
by law to be withheld with respect to the Stock subject to such Option, and the
Company and any Subsidiary shall, to the extent permitted by law, have the right
to deduct any such taxes from any payment of any kind otherwise due to such
Participant. Notwithstanding the above, the Committee may, in its discretion
and pursuant to procedures approved by the Committee, permit the Participant to
(i) elect withholding by the Company of Stock otherwise deliverable to such
Participant pursuant to such Option (PROVIDED, HOWEVER, that the amount of any
Stock so withheld shall not exceed the minimum required withholding obligation
taking into account the Participant's effective tax rate and all applicable
Federal, state, local and foreign taxes) and/or (ii) tender to the Company Stock
owned by such Participant (or by such Participant and his or her spouse jointly)
and acquired more than six (6) months prior to such tender in full or partial
satisfaction of such tax obligations.
10. CHANGES IN CAPITAL. (a) Upon changes in the outstanding Stock by
reason of a stock dividend, stock split, reverse split, subdivision,
recapitalization, merger, consolidation (whether or not the Company is a
surviving corporation), an extraordinary dividend payable in cash or property,
combination or exchange of shares, separation, reorganization or liquidation,
the aggregate number and class of
-9-
shares available under the Plan as to which Options may be granted, the number
and class of shares under each Option and the option price per share shall, in
each case, be correspondingly adjusted by the Committee. Such adjustments shall
be made without change in the total price applicable to such Options.
(b) In the event of (i) a merger, consolidation, combination,
reorganization or other transaction resulting in less than fifty percent (50%)
of the combined voting power of the surviving or resulting entity being owned by
the former shareholders of the Company, (ii) the liquidation or dissolution of
the Company or the sale or other disposition of all or substantially all of the
assets or business of the Company (other than, in the case of either clause (i)
or (ii) above, in connection with any employee benefit plan of the Company or a
Subsidiary), or (iii) an initial public offering of common stock of the Company
pursuant to a registration statement declared effective under the Securities
Act:
(1) In the case of events set forth in clause (i) and (ii) above, on
such terms and conditions as it deems appropriate, the Committee shall
provide, either by the terms of the Agreement applicable to any Option or
by a resolution adopted prior to the occurrence of such event that, for a
specified period of time prior to such event, such Option shall be
accelerated and become immediately exercisable as to all shares of Stock
covered thereby if the exercisability is based upon the achievement of
annual performance targets established by management and approved by the
Board, or if the exercisability is simply dependent upon the passage of
time but not if the exercisability is based upon achieving certain targets
upon a liquidation event, notwithstanding anything to the contrary in the
Plan or the Agreement.
(2) In the case of the event set forth in clause (iii) above, in its
discretion and on such terms and conditions as it deems appropriate, the
Committee may provide, either by the terms of the Agreement applicable to
any Option or by a resolution adopted prior to the occurrence of such event
that, for a specified period of time prior to such event, such Option shall
be accelerated and become immediately exercisable as to all shares of Stock
covered thereby, notwithstanding anything to the contrary in the Plan or
the Agreement.
(3) In its discretion, and on such terms and conditions as it deems
appropriate, the Committee may provide, either by the terms of the
Agreement applicable to any Option or by resolution adopted prior to the
occurrence of such event, that such Option shall be adjusted by
substituting for Stock subject to such Option stock or other securities of
any successor corporation to the Company, or a parent or subsidiary
thereof, or that may be issuable by another corporation that is a party to
the transaction whether or not such stock or other
-10-
securities are publicly traded, in which event the aggregate exercise
price (as applicable) shall remain the same and the amount of shares
or other securities subject to option or other rights under an Option
shall be the amount of shares or other securities which could have
been purchased on the closing date or expiration date of such
transaction with the proceeds which would have been received by the
Participant if the Option had been exercised in full prior to such
transaction or expiration date and the Participant exchanged all of
such shares in the transaction.
(4) In its discretion, and on such terms and conditions as it deems
appropriate, the Committee may provide, either by the terms of the
Agreement applicable to any Option or by resolution adopted prior to the
occurrence of such event, any outstanding Option shall, in each case, be
converted into a right to receive in cash, as soon as practicable following
the closing date or expiration date of the transaction, an amount equal to
value of the consideration to be received in connection with such
transaction for one share of Stock, less the per share exercise price of
such Option, multiplied by the number of shares of Stock subject to such
Option.
(5) At the discretion of the Committee, the Agreement applicable to
any Option may provide that such an Option cannot be exercised after such
an event, to the extent that such Option becomes subject to any
acceleration, adjustment or conversion in accordance with the foregoing
paragraphs (1), (2), (3) or (4) of this subsection 10(b).
No Participant shall have any right to prevent the consummation of any
of the foregoing acts affecting the number of shares available to such
Participant. Any actions or determinations of the Committee under this
Subsection 10(b) need not be uniform as to all outstanding Options, nor treat
all Participants identically. Notwithstanding the foregoing adjustments, in no
event may any Option be exercised after ten (10) years from the date it was
originally granted and any changes to ISOs shall, unless the Committee
determines otherwise, only be effective to the extent such adjustments or
changes do not cause a "modification" (within the meaning of Section 424(h)(3)
of the Code) of such ISOs or adversely affect the tax status of such ISOs.
11. MISCELLANEOUS PROVISIONS. (a) The Plan shall be unfunded. The
Company shall not be required to establish any special or separate fund or to
make any other segregation of assets to assure the issuance of shares or the
payment of cash upon exercise or payment of any Option. Proceeds from the sale
of shares of Stock pursuant to Options granted under the Plan shall constitute
general funds of the Company. The expenses of the Plan shall be borne by the
Company.
-11-
(b) Except as otherwise provided in this paragraph (b) of Section 11,
an Option by its terms shall be personal and may not be sold, transferred,
pledged, assigned, encumbered or otherwise alienated or hypothecated otherwise
than by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of a Participant only by him or her. The foregoing to the
contrary notwithstanding, at the Committee's discretion, an Agreement may permit
(i) the receipt or exercise of a Participant's Option (or any portion thereof)
after his or her death by the beneficiary most recently named by such
Participant in a written designation thereof filed with the Company, or, in lieu
of any such surviving beneficiary, by the legatee of the Participant under the
Participant's last will or by the legal representatives of such Participant's
estate and/or (ii) an Option other than an ISO to be transferred by a
Participant during his or her lifetime to such Participant's alternate payee
pursuant to a "qualified domestic relations order," as defined by the Code or
Title I of the Employee Retirement Income Security Act of 1974, as amended, or
the rules and regulations thereunder. In the event any Option is exercised by
the executors, administrators, heirs or distributees of the estate of a deceased
Participant, or such a Participant's beneficiary, pursuant to the terms and
conditions of the Plan and the applicable Agreement, the Company shall be under
no obligation to issue Stock thereunder unless and until the Company is
satisfied, as determined in the discretion of the Committee, that the person or
persons exercising such Option are the duly appointed legal representative of
the deceased Participant's estate or the proper legatees or distributees thereof
or the named beneficiary of such Participant. Further notwithstanding the
foregoing to the contrary, at the Committee's discretion, an Agreement may
permit the transfer of an Option other than an ISO by the recipient thereof,
subject to such terms, conditions and limitations prescribed by the Committee,
and the applicable transferee of such Option shall be treated under the Plan and
the applicable Agreement as the Participant for purposes of any exercise of such
Option.
(c) If at any time the Committee shall determine, in its discretion,
that the listing, registration and/or qualification of shares of Stock upon any
securities exchange or under any state or Federal law, or the consent or
approval of any governmental regulatory body, is necessary or desirable as a
condition of, or in connection with, the sale or purchase of shares of Stock
hereunder, no Option may be exercised in whole or in part unless and until such
listing, registration, qualification, consent and/or approval shall have been
effected or obtained, or otherwise provided for, free of any conditions not
acceptable to the Committee.
(d) The Committee may require each person receiving Stock in
connection with any Option under the Plan to represent and agree with the
Company in writing that such person is acquiring the shares for investment
without a view to the distribution thereof. The Committee, in its absolute
discretion, may impose such
-12-
restrictions on the ownership and transferability of the shares of Stock
purchasable or otherwise receivable by any person under any Option as it deems
appropriate. Any such restrictions shall be set forth in the applicable
Agreement, and the certificates evidencing such shares may include any legend
that the Committee deems appropriate to reflect any such restrictions.
(e) The Committee may, in its discretion, extend one or more loans to
Participants who are key employees of the Company or a Subsidiary in connection
with the exercise or receipt of an Option granted to any such employees. The
terms and conditions of any such loan shall be set by the Committee.
(f) By accepting any benefit under the Plan, each Participant and each
person claiming under or through such Participant shall be conclusively deemed
to have indicated their acceptance and ratification of, and consent to, all of
the terms and conditions of the Plan and any action taken under the Plan by the
Committee, the Company or the Board.
(g) Neither the adoption of the Plan nor anything contained herein
shall affect any other compensation or incentive plans or arrangements of the
Company or any Subsidiary, or prevent or limit the right of the Company or any
Subsidiary to establish any other forms of incentives or compensation for their
employees or consultants or directors, or grant or assume options or other
rights otherwise than under the Plan.
(h) The Plan shall be governed by and construed in accordance with the
laws of the State of Delaware, except as superseded by applicable Federal law.
12. LIMITS OF LIABILITY. (a) Any liability of the Company or a Subsidiary
to any Participant with respect to any Option shall be based solely upon
contractual obligations created by the Plan and the Agreement.
(b) Neither the Company nor a Subsidiary nor any member of the
Committee or the Board, nor any other person participating in any determination
of any question under the Plan, or in the interpretation, administration or
application of the Plan, shall have any liability, in the absence of bad faith,
to any party for any action taken or not taken in connection with the Plan,
except as may expressly be provided by statute.
13. AMENDMENTS AND TERMINATION. The Board may, at any time and with or
without prior notice, amend, alter, suspend, or terminate the Plan; PROVIDED,
HOWEVER, no amendment, alteration, suspension, or termination shall be made
which would impair
-13-
the previously accrued rights of any holder of an Option theretofore granted
without his or her written consent or which, without first obtaining approval of
the stockholders of the Company (where such approval is necessary to satisfy (i)
any requirements under the Code relating to ISOs or (ii) applicable state law),
would:
(a) except as is provided in Section 10, increase the maximum number
of shares of Stock which may be sold or awarded under the Plan;
(b) except as is provided in Section 10, decrease the minimum option
exercise price requirements of Section 6(a);
(c) change the class of persons eligible to receive Options under the
Plan; or
(d) extend the duration of the Plan or the period during which
Options may be exercised under Section 6(b).
The Committee may amend the terms of any Option theretofore granted,
including any Agreement, retroactively or prospectively, but no such amendment
shall impair the previously accrued rights of any Participant without his or her
written consent.
14. DURATION. Following the adoption of the Plan by the Board, the Plan
shall become effective as of the date on which it is approved by the holders of
a majority of the Company's outstanding Stock which is present and voted at a
meeting, or by written consent in lieu of a meeting, which approval must occur
within the period ending twelve (12) months after the date the Plan is adopted
by the Board. The Plan shall terminate upon the earliest to occur of:
(a) the effective date of a resolution adopted by the Board terminating the
Plan;
(b) the date all shares of Stock subject to the Plan are delivered pursuant
to the Plan's provisions; or
(c) ten (10) years from the date the Plan is approved by the Company's
shareholders.
No Option may be granted under the Plan after the earliest to occur of the
events or dates described in the foregoing paragraphs (a) through (c) of this
Section 14; HOWEVER, Options theretofore granted may extend beyond such date.
-14-
No such termination of the Plan shall affect the previously accrued
rights of any Participant hereunder and all Options previously granted hereunder
shall continue in force and in operation after the termination of the Plan,
except as they may be otherwise terminated in accordance with the terms of the
Plan or the Agreement.
-15-