EXHIBIT 10 AMENDED 1992 INCENTIVE STOCK PLAN
NEUROCRINE BIOSCIENCES, INC.
AMENDED 1992 INCENTIVE STOCK PLAN
(as amended May 27, 1997, May 27, 1998 and May 21, 1999)
1. Purpose of the Plan. The purposes of this Incentive Stock Plan are to attract
and retain the best available personnel, to provide additional incentive to the
employees of Neurocrine Biosciences, Inc. (the "Company") and to promote the
success of the Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written option agreement. The Board also has the discretion to
grant Stock Purchase Rights.
2. Definitions.
(a) "Board" shall mean the Committee, if one has been appointed, or the Board
of Directors of the Company, if no Committee is appointed.
(b) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(c) "Committee" shall mean the Committee appointed by the Board of Directors in
accordance with Section 4(a) of the Plan, if one is appointed.
(d) "Common Stock" shall mean the Common Stock of the Company.
(e) "Company" shall mean Neurocrine Biosciences, Inc.
(f) "Consultant" shall mean any person who is engaged by the Company or any
Parent or Subsidiary to render consulting services and is compensated for
such consulting services, and any director of the Company whether
compensated for such services or not.
(g) "Continuous Status as an Employee or Consultant" shall mean the absence of
any interruption or termination of service as an Employee or Consultant, as
applicable. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, or any
other leave of absence approved by the Board; provided that such leave is
for a period of not more than 90 days or reemployment upon the expiration
of such leave is guaranteed by contract or statute.
(h) "Employee" shall mean any persons, including officers and directors,
employed by the Company or any Parent or Subsidiary of the Company. The
payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(i) "Incentive Stock Option" shall mean an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code.
(j) "Nonstatutory Stock Option" shall mean an Option not intended to qualify as
an Incentive Stock Option.
(k) "Option" shall mean a stock option granted pursuant to the Plan.
(l) "Optioned Stock" shall mean the Common Stock subject to an Option or Stock
Purchase Right.
(m) "Optionee" shall mean an Employee or Consultant who receives an Option.
(n) "Parent" shall mean a "parent corporation," whether now or hereafter
existing, as defined in Section 424(e) of the Code.
(o) "Plan" shall mean this 1992 Incentive Stock Plan.
(p) "Purchaser" shall mean an Employee or Consultant who exercises a Stock
Purchase Right.
(q) "Share" shall mean a share of the Common Stock, as adjusted in accordance
with Section 11 of the Plan.
(r) "Stock Purchase Right" shall mean a right to purchase Common Stock pursuant
to the Plan or the right to receive a bonus of Common Stock for past
services.
(s) "Subsidiary" shall mean a "subsidiary corporation," whether now or
hereafter existing, as defined in Section 424(f) of the Code.
3. Stock Subject to the Plan. Subject to the provisions of Section 11 of the
Plan, the maximum aggregate number of shares under the Plan is 5,300,000 shares
of Common Stock. The Shares may be authorized but unissued, or reacquired Common
Stock.
If an Option or Stock Purchase Right should expire or become unexercisable
for any reason without having been exercised in full, then the unpurchased
Shares which were subject thereto shall, unless the Plan shall have been
terminated, become available for future grant or sale under the Plan.
Notwithstanding any other provision of the Plan, shares issued under the Plan
and later repurchased by the Company shall not become available for future grant
or sale under the Plan.
4. Administration of the Plan.
(a) Procedure. (i) Multiple Administrative Bodies. The Plan may be administered
by different Committees with respect to different groups of Employees and
Consultants. (ii) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m) of
the Code, the Plan shall be administered by a Committee of two or more
"outside directors" within the meaning of Section 162(m) of the Code. (iii)
Rule 16b-3. To the extent desirable to qualify transactions hereunder as
exempt under Rule 16b-3, the transactions contemplated hereunder shall be
structured to satisfy the requirements for exemption under Rule 16b-3. (iv)
Other Administration. Other than as provided above, the Plan shall be
administered by (A) the Board or (B) a Committee, which committee shall be
constituted to satisfy applicable laws.
(b) Powers of the Board. Subject to the provisions of the Plan, the Board shall
have the authority, in its discretion: (i) to grant Incentive Stock
Options, Nonstatutory Stock Options or Stock Purchase Rights; (ii) to
determine, upon review of relevant information and in accordance with
Section 7 of the Plan, the fair market value of the Common Stock; (iii) to
determine the exercise price per share of Options or Stock Purchase Rights,
to be granted, which exercise price shall be determined in accordance with
Section 7 of the Plan; (iv) to determine the Employees or Consultants to
whom, and the time or times at which, Options or Stock Purchase Rights
shall be granted and the number of shares to be represented by each Option
or Stock Purchase Right; (v) to interpret the Plan; (vi) to prescribe,
amend and rescind rules and regulations relating to the Plan; (vii) to
determine the terms and provisions of each Option and Stock Purchase Right
granted (which need not be identical) and, with the consent of the holder
thereof, modify or amend any provisions (including provisions relating to
exercise price) of any Option or Stock Purchase Right; (viii) to accelerate
or defer (with the consent of the Optionee) the exercise date of any
Option, consistent with the provisions of Section 5 of the Plan; (ix) to
authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant of an Option or Stock Purchase Right
previously granted by the Board; (x) to allow Optionees to satisfy
withholding tax obligations by electing to have the Company withhold from
the Shares to be issued upon exercise of an Option or Stock Purchase Right
that number of Shares having a Fair Market Value equal to the amount
required to be withheld. The Fair Market Value of the Shares to be withheld
shall be determined on the date that the amount of tax to be withheld is to
be determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable; and (xi) to make all other
determinations deemed necessary or advisable for the administration of the
Plan.
(c) Effect of Board's Decision. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionees,
Purchasers and any other holders of any Options or Stock Purchase Rights
granted under the Plan. 5. Eligibility. (a) Options and Stock Purchase
Rights may be granted to Employees and Consultants, provided that Incentive
Stock Options may only be granted to Employees. An Employee or Consultant
who has been granted an Option or Stock Purchase Right may, if such
Employee or Consultant is otherwise eligible, be granted additional
Option(s) or Stock Purchase Right(s). (b) Each Option shall be designated
in the written option agreement as either an Incentive Stock Option or a
Nonstatutory Stock Option. However, notwithstanding such designation, to
the extent that the aggregate fair market value of the Shares with respect
to which Options designated as Incentive Stock Options are exercisable for
the first time by any Optionee during any calendar year (under all plans of
the Company) exceeds $100,000, such Options shall be treated as
Nonstatutory Stock Options. (c) For purposes of Section 5(b), Options shall
be taken into account in the order in which they were granted, and the fair
market value of the Shares shall be determined as of the time the Option
with respect to such Shares is granted. (d) The Plan shall not confer upon
any Optionee or holder of a Stock Purchase Right any right with respect to
continuation of employment by or the rendition of consulting services to
the Company, nor shall it interfere in any way with his or her right or the
Company's right to terminate his or her employment or services at any time,
with or without cause. (e) The following limitations shall apply to grants
of Options to Employees: (i) No Employee shall be granted, in any fiscal
year of the Company, Options to purchase more than 250,000 Shares. (ii) In
connection with his or her initial employment, an Employee may be granted
Options to purchase up to an additional 250,000 Shares which shall not
count against the limit set forth in subsection (i) above. (iii) The
foregoing limitations shall be adjusted proportionately in connection with
any change in the Company's capitalization as described in Section 11. (iv)
If an Option is canceled in the same fiscal year of the Company in which it
was granted (other than in connection with a transaction described in
Section 12), the canceled Option shall be counted against the limit set
forth in subsection (i) above. For this purpose, if the exercise price of
an Option is reduced, such reduction will be treated as a cancellation of
the Option and the grant of a new Option. 6. Term of Plan. The Plan shall
become effective upon the earlier to occur of its adoption by the Board of
Directors or its approval by vote of holders of a majority of the
outstanding shares of the Company entitled to vote on the adoption of the
Plan. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 13 of the Plan. 7. Exercise Price and
Consideration. (a) The per Share exercise price for the Shares to be issued
pursuant to exercise of an Option or Stock Purchase Right shall be such
price as is determined by the Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option; (A) granted to an Employee
who, at the time of grant of such Incentive Stock Option, owns stock
representing more than ten percent (10%) of the voting power of all classes
of stock of the Company or any Parent or Subsidiary, the per Share exercise
price shall be no less than 110% of the fair market value per Share on the
date of grant. (B) granted to any other Employee, the per Share exercise
price shall be no less than 100% of the fair market value per Share on the
date of grant. (ii) In the case of a Nonstatutory Stock Option or a Stock
Purchase Right, the per Share exercise price shall be no less than 85% of
the fair market value per Share on the date of grant. In the case of a
Nonstatutory Stock Option intended to qualify as "performance-based
compensation" within the meaning of Section 162(m) of the Code, the per
Share exercise price shall be no less than 100% of the Fair Market Value
per Share on the date of grant. (iii) Notwithstanding the foregoing,
Options may be granted with a per Share exercise price of less than 100% of
the Fair Market Value per Share on the date of grant pursuant to a merger
or other corporate transaction.
For purposes of this Section 7(a), in the event that an Option or Stock
Purchase Right is amended to reduce the exercise price, the date of grant of
such Option or Stock Purchase Right shall thereafter be considered to be the
date of such amendment. (b) The fair market value shall be determined by the
Board in its discretion; provided, however, that where there is a public market
for the Common Stock, the fair market value per Share shall be the mean of the
bid and asked prices (or the closing price per share if the Common Stock is
listed on the National Association of Securities Dealers Automated Quotation
("NASDAQ") National Market System) of the Common Stock for the date of grant, as
reported in the Wall Street Journal (or, if not so reported, as otherwise
reported by the NASDAQ System) or, in the event the Common Stock is listed on a
stock exchange, the fair market value per Share shall be the closing price on
such exchange on the date of grant of the Option or Stock Purchase Right, as
reported in the Wall Street Journal. (c) The consideration to be paid for the
Shares to be issued upon exercise of an Option or Stock Purchase Right,
including the method of payment, shall be determined by the Board (and in the
case of an Incentive Stock Option, shall be determined at the time of grant) and
may consist entirely of cash, check, promissory note, other Shares of Common
Stock which (i) either have been owned by the Optionee for more than six (6)
months on the date of surrender or were not acquired directly or indirectly,
from the Company, and (ii) have a fair market value on the date of surrender
equal to the aggregate exercise price of the Shares as to which said Option
shall be exercised, or any combination of such methods of payment, or such other
consideration and method of payment for the issuance of Shares to the extent
permitted under Sections 408 and 409 of the California General Corporation Law.
In making its determination as to the type of consideration to accept, the Board
shall consider if acceptance of such consideration may be reasonably expected to
benefit the Company (Section 315(b) of the California General Corporation Law).
8. Options. (a) Term of Option. The term of each Option shall be the term stated
in the Option Agreement; provided, however, that the term shall be no more than
ten (10) years from the date of grant thereof. In the case of an Incentive Stock
Option granted to an Optionee who, at the time the Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes of
stock of the Company or any Parent or Subsidiary, the term of the Option shall
be five (5) years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement. (b) Exercise of Option. (i) Procedure for
Exercise; Rights as a Shareholder. Any Option granted hereunder shall be
exercisable at such times and under such conditions as determined by the Board,
including performance criteria with respect to the Company and/or the Optionee,
and as shall be permissible under the terms of the Plan, but in no case at a
rate of less than 20% per year over five (5) years from the date the Option is
granted.
An Option may not be exercised for a fraction of a Share.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company in accordance with the terms of the
Option by the person entitled to exercise the Option and full payment for the
Shares with respect to which the Option is exercised has been received by the
Company. Full payment may, as authorized by the Board, consist of any
consideration and method of payment allowable under Section 7 of, the Plan.
Until the issuance (as evidenced by the appropriate entry on the books of the
Company or of a duly authorized transfer agent of the Company) of the stock
certificate evidencing such Shares no right to vote or receive dividends or any
other rights as a shareholder shall exist with respect to the Optioned Sock,
notwithstanding the exercise of the Option. The Company shall issue (or cause to
be issued) such stock certificate promptly upon exercise of the Option. In the
event that the exercise of a Nonstatutory Stock Option pursuant to Section 5(b),
the Company shall issue a separate stock certificate evidencing the Shares
treated as acquired upon exercise of an Incentive Stock Option and a separate
stock certificate evidencing the Shares treated as acquired upon exercise of a
Nonstatutory Stock Option and shall identify each such certificate accordingly
in its stock transfer records. No adjustment will be made for a dividend or
other right for which the record date is prior to the date the stock certificate
is issued, except as provided in Section 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease in the
number of Shares which thereafter may be available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to which the
Option is exercised. (ii) Termination of Status as an Employee or Consultant. In
the event of termination of an Optionee's Continuous Status as an Employee or
Consultant (as the case may be), such Optionee may, but only within such period
of time as is determined by the Board, with such determination in the case of an
Incentive Stock Option not exceeding three (3) months and in the case of
Nonstatutory Stock Option not exceeding six (6) months after the date of
termination, with such determination in the case of an Incentive Stock Option
being made at the time of grant of the Option, exercise the Option to the extent
that such Employee or Consultant was entitled to exercise it at the date of such
termination (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement). To the extent that such
Employee or Consultant was not entitled to exercise the Option at the date of
such termination, or if such Employee or Consultant does not exercise such
Option (which such Employee or Consultant was entitled to exercise) within the
time specified herein, the Option shall terminate. (iii) Disability of Optionee.
Notwithstanding the provisions of Section 8(b)(ii) above, in the event of
termination of an Optionee's Continuous Status as an Employee or Consultant as a
result of such Employee's or Consultant's total and permanent disability (as
defined in Section 22(e)(3) of the Code), such Employee or Consultant may, but
only within six (6) months (or such other period of time not exceeding twelve
(12) months as in determined by the Board, with such determination in the case
of an Incentive Stock Option being made at the time of gant of the Option) from
the date of such termination (but in no event later than the date of expiration
of the term of such Option as set forth in the Option Agreement), exercise the
Option to the extent such Employee or Consultant was entitled to exercise it at
the date of such termination. To the extent that such Employee or Consultant was
not entitled to exercise the Option at the date of termination, or if such
Employee or Consultant does not exercise such Option (which such Employee or
Consultant was entitled to exercise) within the time specified herein, the
Option shall terminate. (iv) Death of Optionee. In the event of the death of an
Optionee: (A) during the term of the Option who is at the time of his or her
death an Employee or Consultant of the Company and who shall have been in
Continuous Status as an Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time within six (6) months (but in
no event later than the date of expiration of the term of such Option as set
forth in the Option Agreement), by the Optionee's estate or by a person who
acquired the right to exercise the Option by bequest or inheritance, but only to
the extent that the right to exercise would have accrued had the Optionee
continued living and remained in Continuous Status as an Employee or Consultant
six (6) months (or such other period of time as in determined by the Board at
the time of grant of the Option) after the date of death; or (B) within thirty
(30) days (or such other period of time not exceeding three (3) months as is
determined by the Board, with such determination in the case of an Incentive
Stock Option being made at the time of grant of the Option) after the
termination of Continuous Status as an Employee or Consultant, the Option may be
exercised, at any time within six (6) months (or such other period of time as is
determined by the Board at the time of grant of the Option) following the date
of death (but in no event later than the date of expiration of the term of such
Option as set forth in the Option Agreement), by the Optionee's estate or by a
person who acquired the right to exercise the Option by bequest or inheritance,
but only to the extent of the right to exercise that had accrued at the date of
termination. 9. Stock Purchase Rights.
(a) Rights to Purchase. After the Board of Directors determines that it will
offer an Employee or Consultant a Stock Purchase Right, it shall deliver to
the offeree a stock purchase agreement or stock bonus agreement, as the
case may be, setting forth the terms, conditions and restrictions relating
to the offer, including the number of Shares which such person shall be
entitled to purchase, and the time within which such person must accept
such offer, which shall in no event exceed six (6) months from the date
upon which the Board of Directors or its Committee made the determination
to grant the Stock Purchase Right. The offer shall be accepted by execution
of a stock purchase agreement or stock bonus agreement in the from
determined by the Board of Directors.
(b) Issuance of Shares. Forthwith after payment therefor, the Shares purchased
shall be duly issued; provided, however, that the Board may require that
the Purchaser make adequate provision for any Federal and State withholding
obligations of the Company as a condition to the Purchaser purchasing such
Shares.
(c) Repurchase Option. Unless the Board determines otherwise, the stock
purchase agreement or stock bonus agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination
of the Purchaser's employment with the Company for any reason (including
death or disability). If the Board so determines, the purchase price for
shares repurchased may be paid by cancellation of any indebtedness of the
Purchaser to the Company. The repurchase option shall lapse at such rate as
the Board may determine.
(d) Other Provisions. The stock purchase agreement or stock bonus agreement
shall contain such other terms, provisions and conditions not inconsistent
with the Plan as may be determined by the Board of Directors.
10. Non-Transferability of Options and Stock Purchase Rights. Unless determined
otherwise by the Administrator, an Option or Stock Purchase Right may not be
sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner
other than by will or by the laws of descent or distribution and may be
exercised, during the lifetime of the Optionee, only by the Optionee. If the
Administrator makes an Option or Stock Purchase Right transferable, such Option
or Stock Purchase Right shall contain such additional terms and conditions as
the Administrator deems appropriate.
11. Adjustments upon Changes in Capitalization or Merger.
(a) Changes in Capitalization. Subject to any required action by the
shareholders of the Company, the number of shares of Common Stock covered
by each outstanding Option or Stock Purchase Right, and the number of
shares of Common Stock which have been authorized for issuance under the
Plan but as to which no Options or Stock Purchase Rights have yet been
granted or which have been returned to the Plan upon cancellation or
expiration of an Option or Stock Purchase Right, as well as the price per
share of Common Stock covered by each such outstanding Option or Stock
Purchase Right, shall be proportionately adjusted for any increase or
decrease in the number of issued shares of Common Stock resulting from a
stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company. The conversion of any convertible securities
of the Company shall not be deemed to have been "effected without receipt
of consideration." Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares
of stock of any class, or securities convertible into shares of stock of
any class, shall affect, and no adjustment by reason thereof shall be made
with respect to, the number or price of shares of Common Stock subject to
an Option or Stock Purchase Right.
(b) Dissolution or Liquidation. In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify the Optionee or
Purchaser at least fifteen (15) days prior to such proposed action. To the
extent it has not been previously exercised, the Option or Stock Purchase
Right shall terminate immediately prior to the consummation of such
proposed action. (c) Merger or Asset Sale. In the event of a merger, sale
of all or substantially all of the assets of the Company, tender offer or
other transaction or series of related transactions resulting in a change
of ownership of more than 50% of the voting securities of the Company
("Change in Control"), approved by the majority of the members of the Board
on the Board prior to the commencement of such Change in Control, each
outstanding Option shall be assumed or an equivalent option or right
substituted by the successor corporation or a Parent or Subsidiary of the
successor corporation; provided however, in the event that within one year
of the date of the completion of the Change in Control, the successor
corporation or a Parent or Subsidiary of the successor corporation
terminates the employment of an Optionee without Cause (as defined below),
such Optionee shall fully vest in and have the right to exercise the
options assumed or substituted for the Option as to all of the Optioned
Stock, including Shares as to which it would not otherwise be exercisable.
In the event that the successor corporation refuses to assume or substitute
for the Option, the Optionee shall fully vest in and have the right to
exercise the Option as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable. If an Option becomes fully
vested and exercisable in lieu of assumption or substitution in the event
of a Change of Control, the Administrator shall notify the Optionee in
writing or electronically that the Option shall be fully vested and
exercisable for a period of fifteen (15) days from the date of such notice,
and the Option shall terminate upon the expiration of such period. For the
purposes of this paragraph, the Option shall be considered assumed if,
following the Change of Control, the option confers the right to purchase,
for each Share of Optioned Stock subject to the Option immediately prior to
the Change in Control, the consideration (whether stock, cash, or other
securities or property) received in the Change of Control by holders of
Common Stock for each Share held on the effective date of the transaction
(and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding
Shares); provided, however, that if such consideration received in the
Change of Control is not solely common stock of the successor corporation
or its Parent, the Administrator may, with the consent of the successor
corporation, provide for the consideration to be received upon the exercise
of the Option, for each Share of Optioned Stock subject to the Option, to
be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of
Common Stock in the Change of Control. For purposes of this paragraph,
termination shall be for "Cause" in the event of the occurrence of any of
the following: (a) any intentional action or intentional failure to act by
employee which was performed in bad faith and to the material detriment of
the successor corporation or its Parent or Subsidiary; (b) employee
willfully and habitually neglects the duties of employment; or (c) employee
is convicted of a felony crime involving moral turpitude, provided that in
the event that any of the foregoing events is capable of being cured, the
successor corporation or its Parent or Subsidiary shall provide written
notice to the employee describing the nature of such event and the employee
shall thereafter have five (5) business days to cure such event.
In the event of a Change in Control which is not approved by the majority
of the members of the Board on the Board prior to the commencement of a Change
in Control, each Optionee shall fully vest in and have the right to exercise all
outstanding Options as to all of the Optioned Stock, including Shares as to
which it would not otherwise be exercisable. 12. Date of Granting Options. The
date of grant of an Option or Stock Purchase Right shall, for all purposes, be
the date on which the Board makes the determination granting such Option or
stock Purchase Right. Notice of the determination shall be given to each
Employee or Consultant to whom an Option or Stock Purchase Right is so granted
within a reasonable time after the date of such grant. 13. Amendment and
Termination of the Plan. (a) Amendment and Termination. The Administrator may at
any time amend, alter, suspend or discontinue the Plan, but no amendment,
alteration, suspension or discontinuation shall be made which would impair the
rights of any Optionee under any grant theretofore made, without his or her
consent. In addition, to the extent necessary and desirable to comply with
Section 422 of the Code (or any other Applicable Laws or regulation, the
requirements of the NASD or an established stock exchange), the Company shall
obtain shareholder approval of any Plan amendment in such a manner and to such a
degree as required. (b) Effect of Amendment or Termination. Any such amendment
or termination of the Plan shall not affect Options or Stock Purchase Rights
already granted, and such Options and Stock Purchase Rights shall remain in full
force and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Optionee and the Administrator, which
agreement must be in writing and signed by the Optionee and the Company. 14.
Conditions Upon Issuance of Shares. Shares shall not be issued pursuant to the
exercise of an Option or Stock Purchase Rights unless the exercise of such
Option or Stock Purchase Rights and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the exercise of an Option or Stock Purchase Right, the
Company may require the person exercising such Option or Stock Purchase Right to
represent and warrant at the time of any such exercise that the Shares are being
purchased only for investment and without any present intention to sell or
distribute such Shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law. 15. Reservation of Shares. The Company, during the term of this Plan, will
at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained. 16.
Option, Stock Purchase and Stock Bonus Agreements. Options shall be evidenced by
written option agreements in such form as the Board shall approve. Upon the
exercise of Stock Purchase Rights, the Purchaser shall sign a stock purchase
agreement or stock bonus agreement in such form as the Board shall approve. 17.
Shareholder Approval. Continuance of the Plan shall be subject to approval by
the shareholders of the Company within twelve (12) months before or after the
date the Plan is adopted. Such shareholder approval shall be obtained in the
degree and manner required under Applicable Laws and the rules of any stock
exchange upon which the Common Stock is listed. 18. Information to Optionees and
Purchasers. The Company shall provide to each Optionee and Purchaser, during the
period for which such Optionee or Purchaser has one or more Options to Stock
Purchase Rights outstanding, a balance sheet and an income statement at least
annually. The Company shall not be required to provide such information to key
employees whose duties in connection with the Company assure there access to
equivalent information.