EXHIBIT 10.37
NEUROCRINE BIOSCIENCES, INC.
2001 STOCK OPTION PLAN
AS AMENDED AUGUST 6, 2002 AND OCTOBER 15, 2002
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.
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, $.001 per
share, 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 ; provided that (i) such person renders bona fide
services to the Company, (ii) the services rendered by such
person are not in connection with the offer or sale of
securities in a capital-raising transaction and do not
directly or indirectly promote or maintain a market for the
Company's securities, and (iii) such person is a natural
person who has contracted directly with the Company to render
such services. However, the term "Consultant" shall not
include members of the Board of Directors of the Company who
are either not compensated by the Company for their services
as directors or who are merely paid a fee by the Company for
their services as directors.
(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 ninety (90) days
or reemployment upon the expiration of such leave is
guaranteed by contract or statute. Continuous Service shall
not be deemed to have terminated merely because of a change in
the capacity in which the Optionee renders service to the
Company as an Employee or Consultant, provided that the
Optionee's service is continuous.
(h) "Employee" means any person employed by the Company. Mere
service as a member of the Board of Directors or payment of a
director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(i) "Fair Market Value" means, as of any date, the value of
the Common Stock determined as follows:
(i) If the Common Stock is listed on any
established stock exchange or traded on the Nasdaq
National Market or the Nasdaq SmallCap Market, the
Fair Market Value of a share of Common Stock shall be
the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on
such exchange or market (or the exchange or market
with the greatest volume of trading in the Common
Stock) on the last market trading day prior to the
day of determination, as reported by The Nasdaq Stock
Market or such other source as the Board deems
reliable.
(ii) In the absence of such markets for the
Common Stock, the Fair Market Value shall be
determined in good faith by the Board.
(j) "Nonstatutory Stock Option" shall mean an Option not
intended to qualify as an incentive stock option within the
meaning of Section 422 of the Code.
(k) "Officer" means a President, Secretary, Treasurer,
Chairman of the Board, Vice President, Assistant Secretary or
Assistant Treasurer of the Company, as such positions are
described in the Company's Bylaws, any other person designated
an "officer" of the Company by the Board of Directors in
accordance with the Company's Bylaws or any person who is an
"officer" within the meaning of Rule 16a-1(f) under the
Securities Exchange Act of 1934, as amended, or Nasdaq
Marketplace Rule 4350(i)(1)(A).
(l) "Option" shall mean a stock option granted pursuant to the
Plan.
(m) "Optioned Stock" shall mean the Common Stock subject to an
Option or Stock Purchase Right.
(n) "Optionee" shall mean an Employee or Consultant who
receives an Option.
(o) "Parent" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Section 424(e) of the Code.
(p) "Plan" shall mean this 2001 Incentive Stock Plan.
(q) "Purchaser" shall mean an Employee or Consultant who
exercises a Stock Purchase Right.
(r) "Share" shall mean a share of the Common Stock, as
adjusted in accordance with Section 12 of the Plan.
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(s) "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.
(t) "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 12 of
the Plan, the maximum aggregate number of shares that may be issued upon
exercise of Options and Stock Purchase Rights under the Plan is one million, one
hundred fifty thousand (1,150,000) 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 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,
subject to Section 5 below, 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)
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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 statutory minimum 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. 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).
Notwithstanding anything herein to the contrary, the aggregate number of shares
issued or reserved for issuance pursuant to Options granted to persons other
than Officers must exceed fifty percent (50%) of the total number of shares
issued or reserved for issuance pursuant to Options granted under the Plan as
determined on the three-year anniversary of the adoption of the Plan by the
Board and on each yearly anniversary of the adoption of the Plan thereafter.
(b) Each Option shall be designated in the written option
agreement as a Nonstatutory Stock Option.
(c) 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.
(d) A Consultant shall not be eligible for the grant of an
Option if, at the time of grant, a Form S-8 Registration Statement under the
Securities Act ("Form S-8") is not available to register either the offer or the
sale of the Company's securities to such Consultant because of the nature of the
services that the Consultant is providing to the Company, or because the
Consultant is not a natural person, or as otherwise provided by the rules
governing the use of Form S-8, unless the Company determines both (i) that such
grant (A) shall be registered in another manner under the Securities Act (e.g.,
on a Form S-3 Registration Statement) or (B) does not require registration under
the Securities Act in order to comply with the requirements of the Securities
Act, if applicable, and (ii) that such grant complies with the securities laws
of all other relevant jurisdictions
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6. TERM OF PLAN. The Plan shall become effective upon the earlier to occur
of its adoption by the Board of Directors. It shall continue in effect for a
term of ten (10) years unless sooner terminated under Section 14 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) the per Share exercise price shall be no
less than the par value per Share on the date of
grant.
(b) 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 may consist entirely of cash,
check, promissory note bearing a market rate of interest, 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 as may be
permitted under applicable law.
8. 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.
9. EXERCISE OF OPTION.
(a) Procedure for Exercise; Rights as a Shareholder.
(i) 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.
(ii) An Option may not be exercised for a fraction of
a Share.
(iii) 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
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(or cause to be issued) such stock certificate
promptly upon 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
12 of the Plan.
(iv) 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.
(b) 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 not exceeding six
(6) months after the date of termination, 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.
(c) 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 as is determined by the Board) 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 the right to exercise would have accrued had the Optionee continued
Continuous Status as an Employee or Consultant for a period of six (6) months
following termination of Continuous Status by reason of disability. To the
extent that such Employee or Consultant was not entitled to exercise an Option
in this period, 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.
(d) Retirement of Optionee. Notwithstanding the provisions of
Section 8(b)(ii) above, in the event of termination of an Employee Optionee's
Continuous Status as an Employee as a result of such Employee's retirement from
the Company at age fifty five (55) or greater after having Continous Status for
(5) years or more, all Options held by such Optionee shall vest and such
Employee may, but only within three (3) years 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 was entitled to exercise it at the date of such termination.
(e) Death of Optionee. In the event of the death of an
Optionee:
(i) 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
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Employee or Consultant since the date of grant of the
Option, the Option may be exercised, at any time
within six (6) months (or at such later time as may
be determined by the Board 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) after the date of
death; or
(ii) within thirty (30) days (or such other period of
time as is determined by the Board), 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 that the right to
exercise that had accrued at the date of termination.
10. 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.
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11. 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.
12. 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 fifty percent (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
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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.
13. 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.
14. 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.
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(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.
15. 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.
16. 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.
17. 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.
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.
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