EXHIBIT 10.2
GENETRONICS BIOMEDICAL CORPORATION
AMENDED 2000 STOCK OPTION PLAN
INTERPRETATION
DEFINED TERMS - For the purposes of this Plan, the following terms shall have
the following meanings:
"Affiliate" MEANS A PARENT CORPORATION OR A SUBSIDIARY CORPORATION
OF A CORPORATION;
"Associate" MEANS, WHERE USED TO INDICATE A RELATIONSHIP WITH ANY
PERSON,
ANY RELATIVE OF THAT PERSON,
ANY PERSON OF THE OPPOSITE SEX TO WHOM THAT PERSON IS
MARRIED OR WITH WHOM THAT PERSON IS LIVING IN A CONJUGAL
RELATIONSHIP OUTSIDE MARRIAGE,
ANY RELATIVE OF A PERSON MENTIONED IN CLAUSE (II) WHO HAS
THE SAME HOME AS THAT PERSON,
ANY PARTNER OF THAT PERSON,
ANY TRUST OR ESTATE IN WHICH SUCH PERSON HAS A SUBSTANTIAL
BENEFICIAL INTEREST OR AS TO WHICH SUCH PERSON SERVES AS
TRUSTEE OR IN A SIMILAR CAPACITY, OR
ANY CORPORATION OF WHICH SUCH PERSON BENEFICIALLY OWNS,
DIRECTLY OR INDIRECTLY, VOTING SECURITIES CARRYING MORE
THAN 10 PERCENT OF THE VOTING RIGHTS ATTACHED TO ALL
OUTSTANDING VOTING SECURITIES OF THE CORPORATION;
"Beneficial Owner" OF A SECURITY INCLUDES ANY PERSON WHO, DIRECTLY
OR INDIRECTLY, THROUGH ANY CONTRACT, ARRANGEMENT, UNDERSTANDING,
RELATIONSHIP OR OTHERWISE HAS VOTING POWER OVER THE SECURITY OR
THE POWER TO DISPOSE OR DIRECT THE DISPOSITION OF THE SECURITY,
AND ANY PERSON WHO USES A TRUST OR OTHER ARRANGEMENT WITH THE
PURPOSE OR EFFECT OF DIVESTING SUCH PERSON OF BENEFICIAL OWNERSHIP
AS PART OF A PLAN TO EVADE THE REPORTING REQUIREMENTS OF SECTION
13 OF THE EXCHANGE ACT SHALL BE DEEMED TO BE THE BENEFICIAL OWNER
OF THE SECURITY;
"Board" MEANS THE BOARD OF DIRECTORS OF GENETRONICS BIOMEDICAL
CORPORATION;
"Code" MEANS THE UNITED STATES INTERNAL REVENUE CODE OF 1986, AS
AMENDED FROM TIME TO TIME;
"Committee" MEANS A COMMITTEE OF THE BOARD APPOINTED IN ACCORDANCE
WITH THIS PLAN, OR IF NO SUCH COMMITTEE IS APPOINTED, THE BOARD
ITSELF;
"Company" MEANS Genetronics Biomedical Corporation;
"Covered Employee" MEANS THE CHIEF EXECUTIVE OFFICER AND THE FOUR
(4) OTHER HIGHEST COMPENSATED OFFICERS OF THE COMPANY FOR WHOM
TOTAL COMPENSATION IS REQUIRED TO BE REPORTED TO SHAREHOLDERS
UNDER THE
1
EXCHANGE ACT, AS DETERMINED FOR PURPOSES OF SECTION 162(m) OF THE
CODE;
"Date of Grant" MEANS THE DATE ON WHICH A GRANT OF AN OPTION IS
EFFECTIVE;
"Direct or Indirect Ownership" OF SECURITIES BY A PERSON IS
CALCULATED IN ACCORDANCE WITH THE FOLLOWING RULES:
THE PERSON SHALL BE DEEMED TO OWN STOCK OWNED, DIRECTLY OR
INDIRECTLY, BY OR FOR SIBLINGS (INCLUDING HALF SIBLINGS),
SPOUSE, ANCESTORS AND LINEAL DESCENDANTS, AND
STOCK OWNED, DIRECTLY OR INDIRECTLY, BY OR FOR A
CORPORATION, PARTNERSHIP, ESTATE OR TRUST, SHALL BE DEEMED
TO BE OWNED PROPORTIONATELY BY OR FOR ITS SHAREHOLDERS,
PARTNERS OR BENEFICIARIES;
"Disability" MEANS A MEDICALLY DETERMINABLE PHYSICAL OR MENTAL
IMPAIRMENT WHICH CAUSES AN INDIVIDUAL TO BE UNABLE TO ENGAGE IN
ANY SUBSTANTIAL GAINFUL ACTIVITY, AS DETERMINED BY THE COMMITTEE;
"Disposition" INCLUDES A SALE, EXCHANGE, GIFT, OR TRANSFER OF
LEGAL TITLE, BUT DOES NOT INCLUDE A PLEDGE, HYPOTHECATION,
TRANSFER FROM A DECEDENT TO AN ESTATE, TRANSFER BY BEQUEST OR
INHERITANCE, OR THE OTHER EXCEPTED CIRCUMSTANCES REFERRED TO IN
SECTION 424(c) OF THE CODE;
"Effective Date" MEANS THE EFFECTIVE DATE OF THE PLAN, AS ADOPTED
BY THE BOARD AS OF JULY 31, 2000, SUBJECT TO THE APPROVAL OF THE
SHAREHOLDERS OF THE COMPANY;
"Exchange Act" MEANS THE SECURITIES EXCHANGE ACT OF 1934, AS
AMENDED;
"Fair Market Value" MEANS:
WHERE THE SHARES ARE LISTED FOR TRADING ON A STOCK EXCHANGE
OR OVER THE COUNTER MARKET, THE CLOSING PRICE OF THE SHARES
ON THE TRADING DAY IMMEDIATELY PRIOR TO THE DATE OF GRANT
ON SUCH STOCK EXCHANGE OR OVER THE COUNTER MARKET AS MAY BE
SELECTED FOR SUCH PURPOSE BY THE COMMITTEE, OR
WHERE THE SHARES ARE NOT LISTED FOR TRADING ON A STOCK
EXCHANGE OR OVER THE COUNTER MARKET, THE VALUE WHICH IS
DETERMINED BY THE COMMITTEE TO BE THE FAIR VALUE OF THE
SHARES AT THE DATE OF GRANT, TAKING INTO CONSIDERATION ALL
FACTORS THAT THE COMMITTEE DEEMS APPROPRIATE, INCLUDING,
WITHOUT LIMITATION, RECENT SALE AND OFFER PRICES OF THE
SHARES IN PRIVATE TRANSACTIONS NEGOTIATED AT ARM'S LENGTH;
"Guardian" MEANS THE GUARDIAN, IF ANY, APPOINTED FOR AN OPTIONEE;
"ISO" MEANS AN OPTION GRANTED TO AN EMPLOYEE OF THE COMPANY OR AN
AFFILIATE OF THE COMPANY THAT IS INTENDED TO QUALIFY AS AN
"INCENTIVE STOCK OPTION" FOR PURPOSES OF SECTION 422 OF THE CODE
AND IS THEREFORE SUBJECT TO FAVOURABLE TAX TREATMENT UNDER THE
CODE;
"ISO Optionee" MEANS AN OPTIONEE TO WHOM AN ISO HAS BEEN GRANTED;
"Modification" MEANS ANY CHANGE IN THE TERMS OF AN OPTION WHICH
GIVES THE OPTIONEE ADDITIONAL BENEFITS UNDER THE OPTION WITHIN THE
MEANING OF SECTION 424(h) OF THE CODE, BUT SUCH CHANGE SHALL NOT
INCLUDE A CHANGE IN THE TERMS OF AN OPTION:
2
IN THE CASE OF AN OPTION NOT IMMEDIATELY EXERCISABLE IN
FULL, TO ACCELERATE THE TIME WITHIN WHICH THE OPTION MAY BE
EXERCISED, OR ATTRIBUTABLE TO THE ISSUANCE OR ASSUMPTION OF
AN OPTION BY REASON OF A CORPORATE MERGER, CONSOLIDATION,
ACQUISITION OF PROPERTY OR STOCK, SEPARATION,
REORGANIZATION OR LIQUIDATION IF THE NEW OPTION OR
ASSUMPTION OF THE OLD OPTION DOES NOT GIVE THE OPTIONEE
ADDITIONAL BENEFITS WHICH HE DID NOT HAVE UNDER THE OLD
OPTION;
"Non-Employee Director" MEANS A MEMBER OF THE BOARD WHO EITHER (i)
IS NOT A CURRENT EMPLOYEE OR OFFICER (WITHIN THE MEANING OF
SECTION 16 OF THE EXCHANGE ACT AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER) OF THE COMPANY OR AN AFFILIATE OF THE
COMPANY, DOES NOT RECEIVE COMPENSATION (DIRECTLY OR INDIRECTLY)
FROM THE COMPANY OR AN AFFILIATE OF THE COMPANY FOR SERVICES
RENDERED AS A CONSULTANT OR IN ANY CAPACITY OTHER THAN AS A
DIRECTOR (EXCEPT FOR AN AMOUNT AS TO WHICH DISCLOSURE WOULD NOT BE
REQUIRED UNDER ITEM 404(A) OF REGULATION S-K PROMULGATED PURSUANT
TO THE SECURITIES ACT ("REGULATION S-K"), DOES NOT POSSESS AN
INTEREST IN ANY OTHER TRANSACTION AS TO WHICH DISCLOSURE WOULD BE
REQUIRED UNDER ITEM 404(A) OF REGULATION S-K, AND IS NOT ENGAGED
IN A BUSINESS RELATIONSHIP AS TO WHICH DISCLOSURE WOULD BE
REQUIRED UNDER ITEM 404(B) OF REGULATION S-K; OR (ii) IS OTHERWISE
CONSIDERED A "NON-EMPLOYEE DIRECTOR" FOR PURPOSES OF RULE 16b-3;
"Non-ISO" MEANS AN OPTION THAT IS NOT INTENDED TO QUALIFY AS AN
"INCENTIVE STOCK OPTION" FOR PURPOSES OF SECTION 422 OF THE CODE;
"Non-ISO Optionee" MEANS AN OPTIONEE TO WHOM A NON-ISO HAS BEEN
GRANTED;
"Option" MEANS AN OPTION TO PURCHASE SHARES GRANTED PURSUANT TO
THE TERMS OF THIS PLAN;
"Option Agreement" MEANS A WRITTEN AGREEMENT BETWEEN AN OPTIONEE
AND THE COMPANY, SPECIFYING THE TERMS OF THE OPTION BEING GRANTED
TO THE OPTIONEE UNDER THE PLAN;
"Option Price" MEANS THE PRICE AT WHICH AN OPTION IS EXERCISABLE
TO PURCHASE SHARES;
"Optionee" MEANS A PERSON TO WHOM AN OPTION HAS BEEN GRANTED;
"Outside Director" MEANS A DIRECTOR WHO EITHER (i) IS NOT A
CURRENT EMPLOYEE OF THE COMPANY OR AN "AFFILIATED CORPORATION"
(WITHIN THE MEANING OF THE UNITED STATES TREASURY REGULATIONS
PROMULGATED UNDER SECTION 162(m) OF THE CODE), IS NOT A FORMER
EMPLOYEE OF THE COMPANY OR AN "AFFILIATED CORPORATION" RECEIVING
COMPENSATION FOR PRIOR SERVICES (OTHER THAN BENEFITS UNDER A TAX
QUALIFIED PENSION PLAN), WAS NOT AN OFFICER OF THE COMPANY OR AN
"AFFILIATED CORPORATION" AT ANY TIME, AND IS NOT CURRENTLY
RECEIVING DIRECT OR INDIRECT REMUNERATION FROM THE COMPANY OR AN
"AFFILIATED CORPORATION" FOR SERVICES IN ANY CAPACITY OTHER THAN
AS A DIRECTOR, OR (ii) IS OTHERWISE CONSIDERED AN "OUTSIDE
DIRECTOR" FOR PURPOSES OF SECTION 162(m) OF THE CODE;
"Parent Corporation" MEANS ANY CORPORATION IN AN UNBROKEN CHAIN OF
CORPORATIONS ENDING WITH GENETRONICS BIOMEDICAL CORPORATION IF, AT
3
THE DATE OF GRANT, EACH CORPORATION OTHER THAN GENETRONICS
BIOMEDICAL CORPORATION OWNS STOCK POSSESSING 50 PERCENT OR MORE OF
THE TOTAL COMBINED VOTING POWER OF ALL CLASSES OF STOCK IN ONE OF
THE OTHER
CORPORATIONS IN SUCH CHAIN;
"Person" MEANS A NATURAL PERSON, COMPANY, GOVERNMENT, OR POLITICAL
SUBDIVISION OR AGENCY OF A GOVERNMENT; AND WHERE TWO OR MORE
PERSONS ACT AS A PARTNERSHIP, LIMITED PARTNERSHIP, SYNDICATE OR
OTHER GROUP FOR THE PURPOSE OF ACQUIRING, HOLDING OR DISPOSING OF
SECURITIES OF AN ISSUER, SUCH SYNDICATE OR GROUP SHALL BE DEEMED
TO BE A PERSON;
"Plan" MEANS THIS STOCK OPTION PLAN OF THE COMPANY. THE PLAN WAS
ADOPTED BY THE BOARD AS OF JULY 31, 2000 AND APPROVED BY THE
SHAREHOLDERS OF THE COMPANY ON AUGUST 7, 2000. THE PLAN WAS
AMENDED BY THE COMMITTEE ON JUNE 8, 2001, SUBJECT TO THE APPROVAL
OF THE SHAREHOLDERS OF THE COMPANY AND REQUIRED REGULATORY
APPROVALS;
"Rule 16b-3" MEANS RULE 16b-3 OF THE EXCHANGE ACT OR ANY SUCCESSOR
TO RULE 16b-3 AS IN EFFECT WITH RESPECT TO THE COMPANY AT THE TIME
DISCRETION IS BEING EXERCISED REGARDING THE PLAN;
"Qualified Successor" MEANS A PERSON WHO IS ENTITLED TO OWNERSHIP
OF AN OPTION UPON THE DEATH OF AN OPTIONEE, PURSUANT TO A WILL OR
THE APPLICABLE LAWS OF DESCENT AND DISTRIBUTION UPON DEATH;
"Securities Act" MEANS THE SECURITIES ACT OF 1933, AS AMENDED;
"Shares" MEANS THE COMMON SHARES WITHOUT PAR VALUE IN THE CAPITAL
OF GENETRONICS BIOMEDICAL CORPORATION;
"Subsidiary Corporation" MEANS ANY CORPORATION IN AN UNBROKEN
CHAIN OF CORPORATIONS BEGINNING WITH GENETRONICS BIOMEDICAL
CORPORATION IF, AT THE DATE OF GRANT, EACH OF THE CORPORATIONS
OTHER THAN THE LAST CORPORATION OWNS STOCK POSSESSING 50 PERCENT
OR MORE OF THE TOTAL COMBINED VOTING POWER OF ALL CLASSES OF STOCK
IN ONE OF THE OTHER CORPORATIONS IN SUCH CHAIN;
"Term" MEANS THE PERIOD OF TIME DURING WHICH AN OPTION IS
EXERCISABLE; AND
"Terminating Event" MEANS:
THE DISSOLUTION OR LIQUIDATION OF THE COMPANY, A MERGER OR
CONSOLIDATION OF THE COMPANY WITH ONE OR MORE CORPORATIONS
AS A RESULT OF WHICH, IMMEDIATELY FOLLOWING SUCH MERGER OR
CONSOLIDATION, THE SHAREHOLDERS OF THE COMPANY AS A GROUP
WILL HOLD LESS THAN A MAJORITY OF THE OUTSTANDING CAPITAL
STOCK OF THE SURVIVING CORPORATION,
THE SALE OR OTHER DISPOSITION OF ALL OR SUBSTANTIALLY ALL
OF THE ASSETS OF THE COMPANY,
THE OCCURRENCE OF AN EVENT WHEREBY ANY PERSON OR ENTITY
BECOMES THE BENEFICIAL OWNER OF SHARES REPRESENTING 50% OR
MORE OF THE COMBINED VOTING POWER OF THE VOTING SECURITIES
OF THE COMPANY, OR
A MATERIAL CHANGE IN THE CAPITAL STRUCTURE OF THE COMPANY
THAT IS DEEMED TO BE A TERMINATING EVENT BY VIRTUE OF THE
LAST SENTENCE OF SECTION 11.1 OF THIS PLAN OR BY VIRTUE OF
SECTION 11.4 OF THIS PLAN.
STATEMENT OF PURPOSE
4
PRINCIPAL PURPOSES - The principal purposes of the Plan are to provide the
Company and its shareholders with the advantages of the incentive inherent in
stock ownership on the part of employees, officers, directors, and consultants
responsible for the continued success of the Company; to create in such
individuals a proprietary interest in, and a greater concern for, the welfare
and success of the Company; to encourage such individuals to remain with the
Company; and to attract new employees, officers, directors and consultants to
the Company.
ISOs AND NON-ISOs - Under this Plan, the Company may grant either ISOs or
Non-ISOs. Each ISO granted hereunder is intended to constitute an "incentive
stock option," for the purposes of section 422 of the Code, and this Plan and
each such ISO is intended to comply with all of the requirements of Section 422
of the Code and of all other provisions of the Code applicable to incentive
stock options and to plans issuing the same. Each Non-ISO granted hereunder is
intended to constitute an Option that is not an "incentive stock option" for the
purposes of section 422 of the Code, and that does not comply with the
requirements of Section 422 of the Code.
ADMINISTRATION
BOARD OR COMMITTEE - The Plan shall be administered by the Board or by a
committee of the Board appointed in accordance with Section 3.2 or 3.4 below.
APPOINTMENT OF COMMITTEE - The Board may at any time appoint a Committee,
consisting of not less than two of its members, to administer the Plan on behalf
of the Board in accordance with such terms and conditions as the Board may
prescribe, consistent with this Plan. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board. From time to time, the
Board may increase the size of the Committee and appoint additional members,
remove members (with or without cause) and appoint new members in their place,
fill vacancies however caused, or remove all members of the Committee and
thereafter directly administer the Plan. In the discretion of the Board, a
Committee may consist solely of two (2) or more Non-Employee Directors, and/or
Outside Directors. Notwithstanding anything in this Section 3 to the contrary,
the Board or the Committee may delegate to a Committee of one or more members of
the Board the authority to grant Options to eligible persons who (a) are not
then subject to Section 16 of the Exchange Act and/or (b) are either (i) not
then Covered Employees and are not expected to be Covered Employees at the time
of recognition of income resulting from such Options, or (ii) not persons with
respect to whom the Company wishes to comply with Section 162(m) of the Code.
QUORUM AND VOTING - A majority of the members of the Committee shall constitute
a quorum, and, subject to the limitations in this Section 3, all actions of the
Committee shall require the affirmative vote of members who constitute a
majority of such quorum.
COMMITTEE COMPLYING WITH SECTION 162(m) OF THE CODE - If the Company is a
"publicly held corporation" within the meaning of Section 162(m), the Board may
establish a Committee of "outside directors" within the meaning of Section
162(m) to approve the grant of any Option which might reasonably be anticipated
to result in the payment of employee remuneration that would otherwise exceed
the limit on employee remuneration deductible for income tax purposes pursuant
to Section 162(m) of the Code.
POWERS OF COMMITTEE - Any Committee appointed under Section 3.2 or 3.4 above
shall have the authority to do the following:
ADMINISTER THE PLAN IN ACCORDANCE WITH ITS EXPRESS TERMS;
DETERMINE ALL QUESTIONS ARISING IN CONNECTION WITH THE
ADMINISTRATION, INTERPRETATION, AND APPLICATION OF THE PLAN,
INCLUDING ALL QUESTIONS
5
RELATING TO THE VALUE OF THE SHARES;
CORRECT ANY DEFECT, SUPPLY ANY INFORMATION, OR RECONCILE ANY
INCONSISTENCY IN THE PLAN IN SUCH MANNER AND TO SUCH EXTENT AS
SHALL BE DEEMED NECESSARY OR ADVISABLE TO CARRY OUT THE PURPOSES
OF THE PLAN;
PRESCRIBE, AMEND, AND RESCIND RULES AND REGULATIONS RELATING TO
THE ADMINISTRATION OF THE PLAN;
DETERMINE THE DURATION AND PURPOSES OF LEAVES OF ABSENCE FROM
EMPLOYMENT WHICH MAY BE GRANTED TO OPTIONEES WITHOUT
CONSTITUTING A TERMINATION OF EMPLOYMENT FOR PURPOSES OF THE
PLAN;
DO THE FOLLOWING WITH RESPECT TO THE GRANTING OF OPTIONS:
DETERMINE THE EMPLOYEES, OFFICERS, DIRECTORS, OR CONSULTANTS TO WHOM OPTIONS
SHALL BE GRANTED, BASED ON THE ELIGIBILITY CRITERIA SET OUT IN THIS PLAN,
DETERMINE WHETHER SUCH OPTIONS SHALL BE ISOs OR NON-ISOs,
DETERMINE THE TERMS AND PROVISIONS OF THE OPTION AGREEMENT TO BE ENTERED INTO
WITH ANY OPTIONEE (WHICH NEED NOT BE IDENTICAL WITH THE TERMS OF ANY OTHER
OPTION AGREEMENT),
AMEND THE TERMS AND PROVISIONS OF OPTION AGREEMENTS, PROVIDED THE COMMITTEE
OBTAINS:
a) the consent of the Optionee, if the amendment
would adversely affect the rights, or increase the obligations, of the Optionee
under the Option, and
b) the approval of any stock exchange on which
the Company is listed, if such approval is required pursuant to the rules and
policies of such stock exchange,
6
DETERMINE WHEN OPTIONS SHALL BE GRANTED,
DETERMINE THE NUMBER OF SHARES SUBJECT TO EACH OPTION,
MAKE ALL OTHER DETERMINATIONS NECESSARY OR ADVISABLE FOR ADMINISTRATION OF THE
PLAN, AND DETERMINE THE FAIR MARKET VALUE OF THE SHARES.
ADMINISTRATION BY COMMITTEE - The Committee's exercise of the authority set out
in Section 3.4 shall be consistent with the intent that ISOs issued under the
Plan be qualified under the terms of Section 422 of the Code, and that Non-ISOs
shall not be so qualified. All determinations made by the Committee in good
faith on matters referred to in Section 3.4 shall be final, conclusive, and
binding upon all Persons. The Committee shall have all powers necessary or
appropriate to accomplish its duties under this Plan. In addition, the
Committee's administration of the Plan shall in all respects be consistent with
the policies and rules of any stock exchange or over the counter market on which
the Shares are listed.
ELIGIBILITY
ELIGIBILITY FOR ISOs - An ISO may only granted to a person who is an employee of
the Company or an Affiliate of the Company, including directors or officers who
are employees of the Company or an Affiliate of the Company.
ELIGIBILITY FOR NON-ISOs - Non-ISOs may be granted to any employee, officer,
director or consultant of the Company or an Affiliate of the Company.
NO VIOLATION OF SECURITIES LAWS - No Option shall be granted to any Optionee
unless the Committee has determined that the grant of such Option and the
exercise thereof by the Optionee will not violate applicable securities laws.
LIMIT ON MAXIMUM GRANT TO ANY OPTIONEE - Notwithstanding anything in this Plan
to the contrary, no officer or employee of the Company or an Affiliate of the
Company shall receive Options exercisable for more than two million one hundred
thousand (2,100,000) Shares over any three year period, nine hundred thirty-five
thousand (935,000) Shares over any one year period or 5% of the outstanding
Shares.
SHARES SUBJECT TO THE PLAN
NUMBER OF SHARES - The Committee, from time to time, may grant Options to
purchase an aggregate of up to seven million four hundred thousand (7,400,000)
Shares, subject to regulatory approval, to be made available from authorized,
but unissued or reacquired, Shares. In calculating the foregoing seven million
four hundred thousand (7,400,000) Shares, the Committee shall include the
4,467,275 Shares subject to options outstanding as of the Effective Date of the
Plan. The foregoing number of Shares shall be adjusted, where necessary, to take
account of the events referred to in Section 11 hereof.
DECREASE IN NUMBER OF SHARES SUBJECT TO PLAN - Upon exercise of an Option, the
number of Shares thereafter available under the Plan and under the Option shall
decrease by the number of Shares as to which the Option was exercised.
EXPIRY OF OPTION - If an Option expires or terminates for any reason without
having been exercised in full, the unpurchased Shares subject thereto shall
again be available for the purposes of the Plan.
RESERVATION OF SHARES - The Company will at all times reserve and keep available
such number of Shares as shall be sufficient to satisfy the requirements of the
Plan.
7
OPTION TERMS
OPTION AGREEMENT - With respect to each Option to be granted to an Optionee, the
Committee shall specify the following terms in the Option Agreement between the
Company and the Optionee:
WHETHER SUCH OPTION IS AN ISO OR A NON-ISO;
THE NUMBER OF SHARES SUBJECT TO PURCHASE PURSUANT TO SUCH
OPTION, PROVIDED THAT THE NUMBER OF SHARES RESERVED FOR ISSUANCE
TO ANY ONE PERSON PURSUANT TO OPTIONS DOES NOT EXCEED 5% OF THE
OUTSTANDING SHARES;
THE DATE OF GRANT;
THE TERM, PROVIDED THAT:
THE TERM SHALL IN NO EVENT BE MORE THAN TEN (10) YEARS FOLLOWING
THE DATE OF GRANT; AND
IF AN ISO OPTION IS GRANTED TO AN OPTIONEE WHO ON THE DATE OF
GRANT HAS DIRECT OR INDIRECT OWNERSHIP OF MORE THAN 10% OF THE
TOTAL COMBINED VOTING POWER OF ALL CLASSES OF STOCK OF THE
COMPANY, THE TERM OF THE OPTION SHALL NOT EXCEED FIVE (5) YEARS;
THE OPTION PRICE, PROVIDED THAT:
THE OPTION PRICE SHALL NOT BE LESS THAN THE FAIR MARKET VALUE OF
THE SHARES; AND
IF AN OPTION IS GRANTED TO AN OPTIONEE WHO ON THE DATE OF GRANT
HAS DIRECT OR INDIRECT OWNERSHIP OF MORE THAN 10% OF THE TOTAL
COMBINED VOTING POWER OF ALL CLASSES OF STOCK OF THE COMPANY OR
AN AFFILIATE OF THE COMPANY, THEN THE OPTION PRICE SHALL BE AT
LEAST 110% OF THE FAIR MARKET VALUE OF THE SHARES ON THE DATE OF
GRANT, WITH THE PROVISO THAT, WITH RESPECT TO A NON-ISO, THIS
PRICING LIMITATION SHALL NOT BE APPLICABLE IF THE SHARES ARE
LISTED ON A NATIONAL STOCK EXCHANGE;
ANY VESTING SCHEDULE UPON WHICH THE EXERCISE OF AN OPTION IS
CONTINGENT, INCLUDING DISCRETION TO;
ALLOW FULL AND IMMEDIATE VESTING UPON THE GRANT OF SUCH OPTION,
PERMIT PARTIAL VESTING IN STATED PERCENTAGE AMOUNTS BASED ON THE
LENGTH OF THE TERM OF SUCH OPTION;
PERMIT FULL VESTING AFTER A STATED PERIOD OF TIME HAS PASSED
FROM THE DATE OF GRANT; AND
PERMIT EXERCISE OF AN OPTION FOR UNVESTED SHARES, PROVIDED
HOWEVER, THAT GENERALLY ANY UNVESTED SHARES SO PURCHASED SHALL
BE SUBJECT TO A REPURCHASE RIGHT IN FAVOR OF THE COMPANY, WITH
THE REPURCHASE PRICE TO BE EQUAL TO THE ORIGINAL PURCHASE PRICE
OF THE STOCK, OR TO ANY OTHER RESTRICTION THE BOARD DETERMINES
TO BE APPROPRIATE, BUT THAT (A) SUCH REPURCHASE RIGHT SHALL BE
EXERCISABLE ONLY WITHIN (I) THE NINETY (90) DAY PERIOD FOLLOWING
THE TERMINATION OF EMPLOYMENT OR THE RELATIONSHIP AS A DIRECTOR
OR CONSULTANT, OR (II) SUCH LONGER PERIOD AS MAY BE AGREED TO BY
THE COMPANY AND THE OPTIONEE (FOR EXAMPLE, FOR PURPOSES OF
SATISFYING THE REQUIREMENTS OF SECTION 1202(c)(3) OF THE CODE
(REGARDING "QUALIFIED SMALL BUSINESS STOCK")), AND (B) SUCH
RIGHT SHALL BE EXERCISABLE ONLY FOR CASH OR CANCELLATION OF
PURCHASE MONEY INDEBTEDNESS FOR THE SHARES; AND
8
SUCH OTHER TERMS AND CONDITIONS AS THE COMMITTEE DEEMS ADVISABLE
AND ARE CONSISTENT WITH THE PURPOSES OF THIS PLAN.
NO GRANT AFTER TEN YEARS FROM EFFECTIVE DATE - No Option shall be granted under
the Plan later than ten (10) years from the Effective Date of the Plan. Except
as expressly provided herein, nothing contained in this Plan shall require that
the terms and conditions of Options granted under the Plan be uniform.
NO DISPOSITION FOR SIX MONTHS - An Optionee who is subject to Section 16 of the
Exchange Act and whose Option grant is not exempt from Section 16 under Rule
16b-3 shall not make a Disposition of any Shares issued upon exercise of an
Option unless at least six (6) months has elapsed between the Date of Grant of
the Option and the date of Disposition of the Shares issued upon exercise of
such Option. Notwithstanding the foregoing, other than termination for just
cause, if a sale within the applicable time periods set forth in this Section 6
or Section 9 of Shares acquired upon the exercise of an Option would subject the
Optionee to suit under Section 16(b) of the Exchange Act, the Option shall
remain exercisable until the earliest to occur of (i) the tenth (10th) day
following the date on which a sale of such Shares by the Optionee would no
longer be subject to suit, (ii) the one hundred and ninetieth (190th) day after
the Optionee's termination of employment, or (iii) the Option Expiry Date.
LIMITATION ON GRANTS OF OPTIONS
US$100,000 LIMIT ON ISOs.- If the aggregate Fair Market Value (valued as of the
Date of Grant of each ISO) of:
SHARES UNDERLYING ISOs WHICH HAVE BEEN GRANTED TO AN OPTIONEE
UNDER THIS PLAN AND WHICH ARE EXERCISABLE FOR THE FIRST TIME
DURING A CALENDAR YEAR, AND
SHARES UNDERLYING INCENTIVE STOCK OPTIONS WHICH HAVE BEEN
GRANTED TO SUCH OPTIONEE UNDER ANY OTHER PLAN OF THE COMPANY OR
ITS AFFILIATES AND WHICH ARE EXERCISABLE FOR THE FIRST TIME
DURING THAT CALENDAR YEAR,
exceeds US$100,000, as such amount may be adjusted from time to time under
Section 422(d) of the Code, then to the extent of such excess such options shall
be treated as options that are not "incentive stock options" for purposes of the
Code.
EXERCISE OF OPTION
METHOD OF EXERCISE - Subject to any limitations or conditions imposed upon an
Optionee pursuant to the Option Agreement or Section 6 above, an Optionee may
exercise an Option by giving written notice thereof to the Company at its
principal place of business, provided that any Options granted after the Plan is
approved by the required regulatory authorities but prior to the date on which
shareholder approval to the Plan is given, may not be exercised unless and until
the Plan receives shareholder approval.
PAYMENT OF OPTION PRICE - The notice described in Section 8.1 shall be
accompanied by full payment of the aggregate Option Price to the extent the
Option is so exercised, and full payment of any amounts the Company determines
must be withheld for tax purposes from the Optionee pursuant to the Option
Agreement. Such payment shall be:
IN LAWFUL MONEY (UNITED STATES FUNDS) BY CHEQUE;
AT THE DISCRETION OF THE COMMITTEE AND IF SUCH FORM OF PAYMENT IS
PERMITTED UNDER THE CORPORATE LAWS THEN GOVERNING THE COMPANY AND
IF THE COMPANY HAS DISCLOSED TO ITS SHAREHOLDERS THAT IT WILL
ACCEPT
9
SUCH PAYMENT FOR THE EXERCISE OF OPTIONS, BY DELIVERY OF THE
OPTIONEE'S PERSONAL RECOURSE NOTE BEARING INTEREST AT A RATE
DEEMED APPROPRIATE BY THE COMMITTEE;
AT THE DISCRETION OF THE COMMITTEE, AND SUBJECT TO ALL APPLICABLE
SECURITIES LAWS, THROUGH DELIVERY BY THE OPTIONEE AND/OR
WITHHOLDING BY THE COMPANY, OF SHARES HAVING A MARKET VALUE AS OF
THE DATE OF EXERCISE EQUAL TO THE CASH EXERCISE PRICE OF THE
OPTION PLUS ANY AMOUNTS THAT THE COMPANY DETERMINES MUST BE
WITHHELD FROM THE OPTIONEE FOR U.S. OR CANADIAN TAX PURPOSES. THE
MARKET VALUE OF EACH OF THE SHARES ON THE DATE OF DELIVERY SHALL
BE DETERMINED IN GOOD FAITH BY THE COMMITTEE, WHICH DETERMINATION
SHALL BE BINDING FOR ALL PURPOSES HEREUNDER; OR
AT THE DISCRETION OF THE COMMITTEE, BY ANY COMBINATION OF SECTIONS
8.2(a) TO 8.2(c) ABOVE.
ISSUANCE OF STOCK CERTIFICATE - As soon as practicable after exercise of an
Option in accordance with Sections 8.1 and 8.2 above, the Company shall issue a
stock certificate evidencing the Shares with respect to which the Option has
been exercised. Until the issuance of such stock certificate, no right to vote
or receive dividends or any other rights as a shareholder shall exist with
respect to such Shares, notwithstanding the exercise of the Option. 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 below.
TAX WITHHOLDING IN GENERAL - The Company shall have the right to deduct from any
and all payments made under the Plan, or to require the Optionee, through cash
payment or otherwise, to make adequate provision for, the federal, state, local
and foreign taxes, if any, required by law to be withheld by the Company with
respect to an Option or the Shares acquired pursuant thereto. The Company shall
have no obligation to deliver Shares or to release Shares from an escrow
established pursuant to an Option Agreement until the Company's tax withholding
obligations have been satisfied by the Optionee.
TRANSFERABILITY OF OPTIONS
NON-TRANSFERABLE - Unless otherwise specified in an Option Agreement, and except
as provided otherwise in this Section 9, Options are non-assignable and
non-transferable.
DEATH OF OPTIONEE - If the employment of an Optionee as an employee or
consultant of the Company or an Affiliate of the Company, or the position of an
Optionee as a director of the Company or an Affiliate of the Company, terminates
as a result of Optionee's death, any Options held by such Optionee shall pass to
the Qualified Successor of the Optionee, and shall be exercisable by the
Qualified Successor on or before the date which is the earlier of twelve (12)
months following the date of death or the last day of the Term.
DISABILITY OF OPTIONEE - If the employment of an Optionee as an employee or
consultant of the Company or an Affiliate of the Company, or the position of an
Optionee as a director of the Company or an Affiliate of the Company, terminates
as a result of the Optionee's Disability, any Option held by such Optionee that
could have been exercised immediately prior to such termination of service shall
be exercisable by such Optionee, or by such Optionee's Guardian, on or before
the date which is the earlier of twelve (12) months following the termination of
service of such Optionee, and the last day of the Term.
10
DISABILITY AND DEATH OF OPTIONEE - If an Optionee who has ceased to be employed
by the Company or an Affiliate of the Company by reason of such Optionee's
Disability dies within six (6) months after the termination of such employment,
any Option held by such Optionee that could have been exercised immediately
prior to such Optionee's death shall pass to the Qualified Successor of such
Optionee, and shall be exercisable by the Qualified Successor:
IN THE CASE OF AN ISO, ON OR BEFORE A DATE WHICH IS THE EARLIER
OF SIX (6) MONTHS FOLLOWING THE DEATH OF SUCH OPTIONEE, AND THE
LAST DAY OF THE TERM, AND
IN THE CASE OF A NON-ISO, ON OR BEFORE A DATE WHICH IS THE
EARLIER OF TWELVE (12) MONTHS FOLLOWING THE DEATH OF SUCH
OPTIONEE, AND THE LAST DAY OF THE TERM.
DEEMED NON-INTERRUPTION OF EMPLOYMENT - Employment shall be deemed to continue
intact during any military or sick leave or other bona fide leave of absence if
the period of such leave does not exceed ninety (90) days or, if longer, for so
long as the Optionee's right to re-employment with the Company or an Affiliate
of the Company is guaranteed either by statute or by contract. If the period of
such leave exceeds ninety (90) days and the Optionee's re-employment is not so
guaranteed, then such Optionee's employment shall be deemed to have terminated
ninety-one (91) days from the date such leave commenced.
TERMINATION OF OPTIONS
TERMINATION OF OPTIONS - To the extent not earlier exercised or terminated in
accordance with section 9 above, an Option shall terminate at the earliest of
the following dates:
THE TERMINATION DATE SPECIFIED FOR SUCH OPTION IN THE OPTION AGREEMENT;
WHERE THE OPTIONEE'S POSITION AS AN EMPLOYEE, OFFICER, CONSULTANT OR DIRECTOR OF
THE COMPANY OR AN AFFILIATE OF THE COMPANY IS TERMINATED FOR JUST CAUSE, AND THE
OPTIONEE HAS NO CONTINUING BUSINESS RELATIONSHIP WITH THE COMPANY OR AN
AFFILIATE OF THE COMPANY AS AN EMPLOYEE, OFFICER, CONSULTANT OR DIRECTOR, THE
DATE OF SUCH TERMINATION FOR JUST CAUSE;
WHERE THE OPTIONEE'S POSITION AS AN EMPLOYEE, OFFICER, CONSULTANT OR DIRECTOR OF
THE COMPANY OR AN AFFILIATE OF THE COMPANY TERMINATES FOR A REASON OTHER THAN
THE OPTIONEE'S DISABILITY, DEATH, OR TERMINATION FOR JUST CAUSE, AND THE
OPTIONEE HAS NO CONTINUING BUSINESS RELATIONSHIP WITH THE COMPANY OR AN
AFFILIATE OF THE COMPANY AS AN EMPLOYEE, OFFICER, CONSULTANT OR DIRECTOR:
WHERE THE OPTIONEE IS AN OUTSIDE DIRECTOR OF THE COMPANY, THEN ONE (1) YEAR
AFTER SUCH DATE OF TERMINATION, OR
WHERE THE OPTIONEE HELD ANY OTHER POSITION(S) WITH THE COMPANY, THEN NINETY (90)
DAYS AFTER SUCH DATE OF TERMINATION,
except for an Optionee who is subject to restricted
trading periods due to his or her status as an insider,
as determined by the Company, in which case the Option
shall terminate one (1) year or ninety (90) days,
respectively, after the date the next trading window,
immediately following such date of termination of the
Optionee, opens;
THE DATE OF ANY SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION, OR ANY ATTEMPTED
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION, OF SUCH OPTION IN VIOLATION OF
SECTION 9.1 ABOVE; AND
THE DATE SPECIFIED IN SECTION 11.2 BELOW FOR SUCH TERMINATION IN THE EVENT OF A
11
TERMINATING EVENT.
12
VESTING - In the event that an Optionee's position as an employee, officer,
consultant or director of the Company or of an Affiliate of the Company is
terminated, and the Optionee has no continuing business relationship with the
Company or an Affiliate of the Company as an employee, officer, consultant, or
director, the Option held by such Optionee shall cease to vest as at the date of
termination, regardless of whether the Optionee is subject to restricted trading
periods due to his or her status as an insider, as determined by the Company.
ADJUSTMENTS TO OPTIONS
ALTERATION IN CAPITAL STRUCTURE - If there is a material alteration in the
capital structure of the Company resulting from a recapitalization, stock split,
reverse stock split, stock dividend, or otherwise, the Committee shall make such
adjustments to this Plan (and to the Options then outstanding under this Plan)
as the Committee determines to be appropriate and equitable under the
circumstances, so that the proportionate interest of each holder of any such
Option shall, to the extent practicable, be maintained as before the occurrence
of such event. Such adjustments may include, without limitation (a) a change in
the number or kind of shares of stock of the Company covered by such Options, or
other property for which Shares are exchanged as part of such adjustment, and
(b) a change in the Option Price payable per share; provided, however, that the
aggregate Option Price applicable to the unexercised portion of existing Options
shall not be altered, it being intended that any adjustments made with respect
to such Options shall apply only to the price per share and the number of shares
subject thereto. For purposes of this Section 11.1, neither (i) the issuance of
additional shares of stock of the Company in exchange for adequate consideration
(including services), nor (ii) the conversion of outstanding preferred shares of
the Company into Shares shall be deemed to be material alterations of the
capital structure of the Company. If the Committee determines that the nature of
a material alteration in the capital structure of the Company is such that it is
not practical or feasible to make appropriate adjustments to this Plan or to the
Options granted hereunder, such event shall be deemed a Terminating Event for
the purposes of this Plan.
TERMINATING EVENTS - Subject to Section 11.3, all Options granted under the Plan
shall terminate upon the occurrence of a Terminating Event.
NOTICE OF TERMINATING EVENT - The Committee shall give notice of the imminent
consummation of a Terminating Event to Optionees and persons whose Shares are
subject to a repurchasing right under the Plan, not less than thirty days prior
to the consummation of a Terminating Event. Upon the giving of such notice, all
repurchase rights of the Company under the Plan shall terminate, and all
Options, shall become immediately exercisable, notwithstanding any contingent
vesting provisions to which such Options may have otherwise been subject.
CORPORATE REORGANIZATION - In the event of a reorganization as defined in this
Section 11.4 in which the Company is not the surviving or acquiring corporation,
or in which the Company is or becomes a wholly-owned subsidiary of another
corporation after the effective date of the reorganization, then unless
provision is made by the acquiring corporation for the assumption of each Option
granted under this Plan, or the substitution of an option therefor, such that no
Modification of any such Option occurs, all Options granted under this Plan
shall terminate and such event shall be deemed a Terminating Event. For purposes
of this Section 11.4, "reorganization" shall mean any statutory merger,
statutory consolidation, sale of all or substantially all of the assets of the
Company, or sale, pursuant to an agreement with the Company, of securities of
the Company pursuant to which the Company is or becomes a wholly-owned
subsidiary of another corporation after the effective date of the
reorganization.
13
ACCELERATION OF VESTING SCHEDULE - The Committee shall have the right, in its
sole discretion, to accelerate the vesting schedule of any Option.
DETERMINATIONS TO BE MADE BY COMMITTEE - Adjustments and determinations under
this Section 11 shall be made by the Committee, whose decisions as to what
adjustments or determination shall be made, and the extent thereof, shall be
final, binding, and conclusive.
TERMINATION AND AMENDMENT OF PLAN
TERMINATION OF PLAN - Unless earlier terminated as provided in Section 11 above
or in Section 12.2 below, the Plan shall terminate on, and no Option shall be
granted under the Plan, after the end of the day prior to the tenth anniversary
of the Effective Date.
POWER OF COMMITTEE TO TERMINATE OR AMEND PLAN - Subject to the approval of any
stock exchange on which the Company is listed, the Committee may terminate,
suspend or amend the terms of the Plan; provided, however, that, except as
provided in Section 11 above no amendment shall be effective unless approved by
the shareholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will: (a) increase the number of
shares reserved for Options under the Plan; (b) modify the requirements as to
eligibility for participation in the Plan (to the extent such modification
requires shareholder approval in order for the Plan to satisfy the requirements
of Section 422 of the Code); or (c) modify the Plan in any other way if such
modification requires shareholder approval in order for the Plan to satisfy the
requirements of Section 422 of the Code, Rule 16b-3 or any Nasdaq or securities
exchange listing requirements. Upon any termination, suspension or amendment of
the Plan, the Company shall notify the Optionees then holding Options under the
Plan of such termination, suspension or amendment, and upon receipt of such
notification, all Optionees will then be deemed to be bound by such termination,
suspension or the provisions of such amendment to the Plan, as the case may be.
NO GRANT DURING SUSPENSION OF PLAN - No Option may be granted during any
suspension, or after termination, of the Plan. Amendment, suspension, or
termination of the Plan shall not, without the consent of the Optionee, impair
any rights or increase any obligations of the Optionee under any Option
previously granted prior to such amendment, suspension or termination.
CONVERSION OF ISOS INTO NON-ISOS
CONVERSION OF ISOs INTO NON-ISOs - At the written request of any ISO Optionee,
the Committee may in its discretion take such actions as may be necessary to
convert such Optionee's ISOs (or any installments or portions of installments
thereof) that have not been exercised on the date of conversion into Non-ISOs at
any time prior to the expiration of such ISOs, regardless of whether the
Optionee is an employee of the Company or an Affiliate of the Company at the
time of such conversion. Such actions include, but shall not be limited to,
extending the exercise period of such ISOs. At the time of such conversion, the
Committee, with the consent of the Optionee, may impose such conditions on the
exercise of the resulting Non-ISOs as the Committee in its discretion may
determine, provided that such conditions are consistent with this Plan. Nothing
in the Plan shall be deemed to give any Optionee the right to have such
Optionee's ISOs converted into Non-ISOs, and no such conversion shall occur
until and unless the Committee takes appropriate action, unless such conversion
is required by applicable law. The Committee, with the consent of the Optionee,
may also terminate any portion of any ISO that has not been exercised at the
time of such conversion.
14
CONDITIONS PRECEDENT TO ISSUANCE OF SHARES
COMPLIANCE WITH SECURITIES LAWS - Options shall not be granted and Shares shall
not be issued pursuant to the exercise of any Option unless the grant and
exercise of such Option and the issuance and delivery of such Shares comply with
all relevant provisions of law, including, without limitation, the Securities
Act, the Exchange Act, any applicable state or provincial securities law, the
rules and regulations promulgated thereunder, and the requirements of any stock
exchange upon which the Shares may then be listed or otherwise traded.
REGULATORY APPROVAL TO ISSUANCE OF SHARES - The Company shall seek to obtain
from regulatory commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell Shares upon the exercise of any
Option; provided, however, that this undertaking shall not require the Company
to register under the Securities Act (or any other applicable law for the
registration and sale of securities) either the Plan, any Option or any Shares
issued or issuable pursuant to any such Option. If, after reasonable efforts,
the Company is unable to obtain from any such regulatory commission or agency
the authority which counsel for the Company deems necessary for the lawful
issuance and sale of stock under the Plan, the Company shall be relieved from
any liability for failure to issue and sell stock upon exercise of any such
Options unless and until such authority is obtained.
USE OF PROCEEDS
USE OF PROCEEDS - Proceeds from the sale of Shares made pursuant to the exercise
of an Option shall constitute general funds of the Company and shall be used for
general corporate purposes.
NOTICES
NOTICES - All notices, requests, demands and other communications required or
permitted to be given under this Plan and the Options granted under this Plan
shall be in writing and shall be either served personally on the party to whom
notice is to be given, in which case notice shall be deemed to have been duly
given on the date of such service; telefaxed, in which case notice shall be
deemed to have been duly given on the date the telefax is sent; or mailed to the
party to whom notice is to be given, by registered or certified first class
mail, return receipt requested, postage prepaid, and addressed to the party at
his, her or its most recent known address, in which case such notice shall be
deemed to have been duly given on the tenth postal delivery day following the
date of such mailing.
MISCELLANEOUS PROVISIONS
NO OBLIGATION TO EXERCISE - An Optionee shall be under no obligation to exercise
such Optionee's Option.
NO OBLIGATION TO RETAIN OPTIONEE - Nothing contained in this Plan shall obligate
the Company or an Affiliate of the Company to retain an Optionee as an employee,
officer, director, or consultant for any period, nor shall this Plan interfere
in any way with the right of the Company or an Affiliate of the Company to
reduce such Optionee's compensation.
BINDING AGREEMENT - The provisions of this Plan and each Option Agreement with
an Optionee shall be binding upon such Optionee and any Qualified Successor or
Guardian of such Optionee.
15
USE OF TERMS - Where the context so requires, references herein to the singular
shall include the plural, and vice versa.
HEADINGS - The headings used in this Plan are for convenience of reference only
and shall not in any way affect or be used in interpreting any of the provisions
of this Plan.
SHAREHOLDER APPROVAL OF PLAN
SHAREHOLDER APPROVAL OF PLAN - This Plan must be approved by a majority of the
votes cast at a meeting of the shareholders of the Company, other than votes
attaching to securities beneficially owned by:
INSIDERS OF THE COMPANY, MEANING DIRECTORS, OFFICERS AND GREATER
THAN 10% SHAREHOLDERS; AND
ASSOCIATES OF PERSONS REFERRED TO IN SUBPARAGRAPH 18.1(a) ABOVE.
MERGER OF FORMER STOCK OPTION PLANS
Upon receipt of shareholder and regulatory approval, the 1997 Stock Option Plan
and the 1995 Stock Option Plan of the Company, as amended, shall both be deemed
to be merged herein, such that all options outstanding under the 1997 Stock
Option Plan of the Company (the "1997 Options") and the 1995 Stock Option Plan
of the Company (the "1995 Options") shall be deemed to be outstanding under the
Plan to the same extent as if they were originally granted hereunder, and shall
be governed hereby and entitled to all of the benefits and obligations herein.
The Committee shall be authorized to amend, at any time and from time to time,
all or any of the 1997 Options and the 1995 Options as the Committee may
determine necessary or advisable or may otherwise deem appropriate, to conform
such agreements to this Plan.
16