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EXHIBIT 10.2
DURA PHARMACEUTICALS, INC.
1992 STOCK OPTION PLAN
EFFECTIVE DECEMBER 9, 1992; AS AMENDED JUNE 2, 1994; AS
AMENDED MAY 25, 1995; AS AMENDED MAY 29, 1996
AS AMENDED JULY 1, 1996
ARTICLE ONE
GENERAL PROVISIONS
PURPOSE OF THE PLAN
A. Implementation. This 1992 Stock Option Plan ("Plan") is implemented
as of December 9, 1992 ("Effective Date"), to enable Dura Pharmaceuticals, Inc.
("Company") to grant options to the following eligible individuals ("Eligible
Individuals") in order to attract them and to retain their services: (a) key
employees (including officers and directors) of the Company or its subsidiaries
or any parent corporation who are primarily responsible for the management,
growth and financial success of the Company or its subsidiaries, (b)
non-employee members of the Board of Directors ("Board") of the Company, and (c)
consultants and independent contractors who perform valuable services for the
Company or its subsidiaries.
B. Successor Plan. This Plan is a successor to the Company Stock Option
Plan that was adopted by the Board in 1983 ("1983 Plan"). No further option
grants (including, but not limited to automatic option grants) will be made
under the 1983 Plan on and after the Effective Date of this Plan. All options
outstanding under the 1983 Plan on the Effective Date are hereby incorporated
into this Plan and will be treated as outstanding options under this Plan. Each
outstanding option so incorporated will continue to be governed solely by the
express terms and conditions of the instruments evidencing such grant. No
provision of this Plan will be deemed to affect or otherwise modify the rights
or obligations of the holders of such incorporated options with respect to their
acquisition of shares of the Company's Common Stock under the terms of the
incorporated options.
II. ADMINISTRATION OF THE PLAN
A. Committee. The Plan will be administered by a committee or
committees appointed by the Board, and consisting of two or more members of the
Board. The Board may delegate the responsibility for administration of the Plan
with respect to designated classes of optionees to different committees, subject
to such limitations as the Board deems appropriate.
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With respect to any matter, the term "Committee," when used in this Plan, will
refer to the committee that has been delegated authority with respect to such
matter. Members of a committee will serve for such term as the Board may
determine, and will be subject to removal by the Board at any time.
B. Section 16(b) Committee. The composition of any committee
responsible for administration of the Plan with respect to optionees who are
subject to the trading restrictions of Section 16(b) of the Securities Exchange
Act of 1934 with respect to securities of the Company will comply with the
applicable requirements of Rule 16b-3 of the Securities and Exchange Commission.
C. Authority. Any Committee will have full authority to administer the
Plan within the scope of its delegated responsibilities, including authority to
interpret and construe any relevant provision of the Plan, to adopt such rules
and regulations as it may deem necessary, and to determine the terms of grants
made under the Plan (which need not be identical). Decisions of a Committee made
within the discretion delegated to it by the Board will be final and binding on
all persons.
III. STOCK SUBJECT TO THE PLAN
A. Number of Shares. Shares of the Company's Common Stock available for
issuance under the Plan shall be drawn from either the Company's authorized but
unissued shares of Common Stock or from reacquired shares of Common Stock,
including shares repurchased by the Company on the open market. The maximum
number of shares of Common Stock that may be issued over the term of the Plan
shall not exceed 6,007,360 shares, subject to adjustment from time to time in
accordance with the provisions of this Section. This authorized share reserve is
comprised of (i) the number of shares remaining available for issuance under the
1983 Plan as of the Effective Date, including the shares subject to the
outstanding options incorporated into this Plan and any other shares that would
have been available for future option grant under the 1983 Plan, plus (ii) an
additional 416,040 shares of Common Stock, plus (iii) an additional increase of
750,000 shares of Common Stock, plus (iv) an additional increase of 1,000,000
shares of Common Stock plus (v) an additional increase of 1,500,000 shares of
Common Stock. Accordingly, to the extent one or more outstanding options under
the 1983 Plan that have been incorporated into this Plan are subsequently
exercised, the number of shares issued with respect to each such option will
reduce, on a share-for-share basis, the number of shares available for issuance
under this Plan.
B. Expired Options. Should an outstanding option under this Plan
(including any outstanding option under the 1983 Plan incorporated into this
Plan) expire or terminate for any reason prior to exercise in full (including
any option cancelled in accordance with the cancellation-regrant provisions of
this Plan), the shares subject to the portion of the option not so exercised
will be available for subsequent option grant under this Plan. Shares subject to
any option or portion thereof cancelled in accordance with the stock
appreciation (or limited stock
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appreciation) rights provisions of this Plan will not be available for
subsequent option grant under the Plan.
C. Adjustments. If any change is made to the Common Stock issuable
under the Plan (including Common Stock issuable under an Automatic Option Grant)
by reason of any stock split, stock dividend, recapitalization, combination of
shares, exchange of shares or other change affecting the outstanding Common
Stock as a class without receipt of consideration, then appropriate adjustments
will be made to (i) the number and/or class of shares issuable under the Plan,
(ii) the number and/or class of shares and price per share in effect under each
outstanding option under the Plan, and (iii) the number and/or class of shares
and price per share in effect under each outstanding option incorporated into
this Plan from the 1983 Plan. The purpose of these adjustments will be to
preclude the enlargement or dilution of rights and benefits under the options.
ARTICLE TWO
STANDARD OPTION PROVISIONS
TERMS AND CONDITIONS OF OPTIONS
Committee Discretion.
Except as provided under the Automatic Option Grant
provisions of this Plan, the Committee will have full authority to determine
which Eligible Individuals are to receive option grants under the Plan, the
number of shares to be governed by each such grant, whether the option is to be
an incentive stock option ("Incentive Option") that satisfies the requirements
of Section 422 of the Internal Revenue Code or a non-qualified option not
intended to satisfy such requirements ("Non-Qualified Option"), the time or
times at which each such option is to become exercisable, and the maximum term
for which the option is to remain outstanding.
Notwithstanding any other provision of this Plan, no
individual shall be granted options to acquire more than 200,000 shares in any
fiscal year or 750,000 shares over the lifetime of the Plan.
B. Term. No option granted under the Plan will be exercisable after the
expiration of 10 years from the date the option was granted.
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C. Price. The option price per share will be fixed by the Committee;
provided, however, that in no event will the option price per share be less than
100% of the Fair Market Value of a share of Common Stock on the date of the
option grant.
D. Exercise and Payment. After any option granted under the Plan
becomes exercisable, it may be exercised by notice to the Company at any time
prior to the termination of such option. The option price will be payable in
full in cash or check made payable to the Company; provided, however, that the
Committee may, either at the time the option is granted or at the time it is
exercised and subject to such limitations as it may determine, authorize payment
of all or a portion of the option price in one or more of the following
alternative forms:
(1) a promissory note authorized pursuant to Section IV of
this Article; or
(2) full payment in shares of Common Stock valued as of the
exercise date and held for the requisite period to avoid a charge to the
Company's earnings; or
(3) full payment through a sale and remittance procedure under
which the option holder delivers a properly executed exercise notice together
with irrevocable instructions to a broker to promptly deliver to the Company the
amount of sale proceeds to pay the option prices.
For purposes of Subparagraphs (1) and (3) immediately above, the Exercise Date
shall be the date on which written notice of the exercise of the option is
delivered to the Company. In all other cases, the Exercise Date will be the date
on which written notice and actual payment is received by the Company.
The sale and remittance procedure authorized for the exercise of
outstanding options under this Plan shall be available for all options granted
under this Plan on or after the Effective Date and for all non-qualified options
outstanding under the 1983 Plan and incorporated into this Plan. The Plan
Administrator may also allow such procedure to be utilized in connection with
one or more disqualifying dispositions of Incentive Option shares effected after
the Effective Date, whether such Incentive Options were granted under this Plan
or the 1983 Stock Option Plan.
E. Shareholder Rights. An option holder will have no shareholder rights
with respect to any shares covered by an option (including an Automatic Option
Grant) prior to the Exercise Date of the option, as defined in the immediately
preceding Paragraph and in the Automatic Option Grant provisions of Section II
of Article Three of this Plan.
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F. Separation from Service. The Committee will determine whether
options will continue to be exercisable, and the terms of such exercise, on and
after the date that an optionee ceases to be employed by, or to provide services
to, the Company or its subsidiaries provided, however, that in no event will an
option be exercisable after the specified expiration date of the option term.
The date of termination of an optionee's employment or services will be
determined by the Committee, which determination will be final.
G. Incentive Options. Options granted under the Plan that are intended
to be Incentive Options will be subject to the following additional terms:
(1) Dollar Limitation. The aggregate fair market value
(determined as of the respective date or dates of grant) of the Common Stock for
which one or more options granted to any Employee after December 31, 1986 under
this Plan (or any other option plan of the Company or its parent or subsidiary
corporations) may for the first time become exercisable as incentive stock
options under the Federal tax laws during any one calendar year shall not exceed
the sum of $100,000. To the extent the Employee holds two or more such options
which become exercisable for the first time in the same calendar year, the
foregoing limitation on the exercisability of such options as incentive stock
options under the Federal tax laws shall be applied on the basis of the order in
which such options are granted.
(2) 10% Shareholder. If any employee to whom an Incentive
Option is to be granted pursuant to the provisions of the Plan is, on the date
of grant, the owner of stock (determined with application of the ownership
attribution rules of Section 424(d) of the Internal Revenue Code) possessing
more than 10% of the total combined voting power of all classes of stock of his
or her employer corporation or of its parent or subsidiary corporation ("10%
Shareholder"), then the following special provisions will apply to the option
granted to such individual:
(i) The option price per share of the stock
subject to such Incentive Option will not be less than 110% of the Fair Market
Value of the option shares on the date of grant; and
(ii) The option will not have a term in excess of 5 years
from the date of grant.
(3) Parent and Subsidiary. For purposes of this Section,
"parent corporation" and "subsidiary corporation" will have the meaning
attributed to those terms, as they are used in Section 422(b) of the Internal
Revenue Code.
(4) Employees. Incentive Options may only be granted to
employees of the Company or its subsidiaries.
H. Fair Market Value. For all purposes under this Plan (including, but
not limited to Automatic Option Grants) the fair market value per share of
Common Stock on any relevant date under the Plan ("Fair Market Value") will be
determined as follows:
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(1) If the Common Stock is not at the time listed or admitted
to trading on any national stock exchange but is traded in the over-the-counter
market, the fair market value will be the mean between the highest bid and
lowest asked prices (or, if such information is available, the closing selling
price) per share of Common Stock on the date in question in the over-the-counter
market, as such prices are reported by the National Association of Securities
Dealers through its NASDAQ system or any successor system. If there are no
reported bid and asked prices (or closing selling price) for the Common Stock on
the date in question, then the mean between the highest bid price and lowest
asked price (or the closing selling price) on the last preceding date for which
such quotations exist will be determinative of fair market value.
(2) If the Common Stock is at the time listed or admitted to
trading on any national stock exchange, then the fair market value will be the
closing selling price per share of Common Stock on the date in question on the
stock exchange determined by the Committee to be the primary market for the
Common Stock, as such price is officially quoted in the composite tape of
transactions on such exchange. If there is no reported sale of Common Stock on
such exchange on the date in question, then the fair market value will be the
closing selling price on the exchange on the last preceding date for which such
quotation exists.
(3) If the Common Stock is at the time neither listed nor
admitted to trading on any stock exchange nor traded in the over-the-counter
market, then the fair market value will be determined by the Committee after
taking into account such factors as the Committee shall deem appropriate.
I. Transferability. During the lifetime of the optionee, options
(including Automatic Option Grants) shall be exercisable only by the optionee
and shall not be assignable or transferable by the optionee otherwise than by
Will or by the laws of descent and distribution following the optionee's death.
STOCK APPRECIATION RIGHTS
If, and only if the Committee, in its discretion, elects to implement
an option surrender program under the Plan, one or more option holders may, upon
such terms as the Committee may establish at the time of the option grant or at
any time thereafter, be granted the right to surrender all or part of an
unexercised option in exchange for a distribution equal in amount to the
difference between (i) the Fair Market Value (at date of surrender) of the
shares for which the surrendered option or portion thereof is at the time
exercisable and (ii) the aggregate option price payable for such shares. The
distribution to which an option holder becomes entitled under this Section may
be made in shares of Common Stock, valued at Fair Market Value at the date of
surrender, in cash, or partly in shares and partly in cash, as the Committee, in
its sole discretion, deems appropriate. The option surrender provisions of this
Section will not apply to options granted pursuant to the Automatic Option Grant
provisions of this Plan.
III. CORPORATE TRANSACTION/CHANGE OF CONTROL/HOSTILE TAKEOVER
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Corporate Transaction. In the event of any of the following
transactions ("Corporate Transaction"):
(1) a merger or consolidation in which the Company is not the
surviving entity, except for a transaction the principal purpose of which is to
change the state of the Company's incorporation,
(2) the sale, transfer or other disposition of all or
substantially all of the assets of the Company in liquidation or dissolution of
the Company,
(3) any reverse merger in which the Company is the surviving
entity but in which fifty percent (50%) or more of the Company's outstanding
voting stock is transferred to holders different from those who held such
securities immediately prior to such merger, or
(4) an acquisition by any person or related group of persons
(other than the Company or a person that directly or indirectly controls, is
controlled by or is under common control with, the Company) of ownership of more
than fifty percent (50%) of the Company's outstanding Common Stock, pursuant to
a tender or exchange offer,
the exercisability of each option at the time outstanding under this Article Two
shall automatically accelerate so that each such option shall, immediately prior
to the specified effective date for the Corporate Transaction, become fully
exercisable with respect to the total number of shares of Common Stock at the
time subject to such option and may be exercised for all or any portion of such
shares. Upon the consummation of the Corporate Transaction, all outstanding
options under this Article Two shall terminate and cease to be outstanding.
B. Hostile Takeover. One or more officers of the Company subject to the
short-swing profit restrictions of the Federal securities laws may, in the
Committee's sole discretion, be granted, in tandem with their outstanding
options, limited stock appreciation rights as described below. In addition all
Automatic Option Grants under this Plan will be made in tandem with limited
stock appreciation rights as described below.
(1) Upon the occurrence of a Hostile Takeover, each
outstanding option with such a limited stock appreciation right in effect for at
least six (6) months will automatically be cancelled in return for a cash
distribution from the Company in an amount equal to the excess of (i) the
Takeover Price (defined below) of the shares of Common Stock at the time subject
to the cancelled option (whether or not the option is otherwise at the time
exercisable for such shares) over (ii) the aggregate exercise price payable for
such shares. The cash distribution payable upon such cancellation shall be made
within five (5) days following the consummation of the Hostile Takeover. Neither
the approval of the Committee nor the consent of the Board shall be required in
connection with such option cancellation and cash distribution.
(2) For purposes of the limited stock appreciation rights
described above, the following definitions shall be in effect:
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(i) A Hostile Takeover shall be deemed to occur upon
the acquisition by any person or related group of persons (other than the
Company or a person that directly or indirectly controls, is controlled by, or
is under common control with, the Company) of ownership of more than 50% of the
Company's outstanding Common Stock (excluding the Common Stock holdings of
officers and directors of the Company who participate in this Plan) pursuant to
a tender or exchange offer which the Board does not recommend the Company's
shareholders accept.
(ii) The Takeover Price per share shall be deemed to be
equal to the greater of (a) the Fair Market Value per share on the date of
cancellation, or (b) the highest reported price per share paid in effecting the
Hostile Takeover. However, if the cancelled option is an Incentive Option, the
Takeover Price shall not exceed the clause (a) price per share.
C. Company Rights. The grant of options (including Automatic Option
Grants) under this Plan shall in no way affect the right of the Company to
adjust, reclassify, reorganize or otherwise change its capital or business
structure or to merge, consolidate, dissolve, liquidate or sell or transfer all
or any part of its business or assets.
IV. LOANS OR GUARANTEE OF LOANS
The Committee may assist any optionee (including any officer) in the
exercise of one or more outstanding options under this Article by (a)
authorizing the extension of a loan to such optionee from the Company, (b)
permitting the optionee to pay the option price for the purchased Common Stock
in installments over a period of years or (c) authorizing a guarantee by the
Company of a third-party loan to the optionee. The terms of any loan,
installment method of payment or guarantee (including the interest rate and
terms of repayment) will be established by the Committee in its sole discretion.
Loans, installment payments and guarantees may be granted without security or
collateral (other than to optionees who are consultants or independent
contractors, in which event the loan must be adequately secured by collateral
other than the purchased shares), but the maximum credit available to the
optionee shall not exceed the sum of (i) the aggregate option price (less par
value) of the purchased shares plus (ii) any federal and state income and
employment tax liability incurred by the optionee in connection with the
exercise of the option. Automatic Option Grants will not be subject to these
loan and loan guarantee provisions.
V. CANCELLATION AND REGRANT OF OPTIONS
The Committee shall have the authority to effect, at any time and from
time to time, with the consent of the affected optionees, the cancellation of
any or all outstanding options under this Article (including outstanding options
under the 1983 Plan incorporated into this Plan) and to grant in substitution
new options under the Plan covering the same or different numbers of shares of
Common Stock but having an option price per share not less than 100% of the fair
market
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value of the Common Stock on the new grant date. Automatic Option Grants will
not be subject to these cancellation and regrant provisions.
V. REPURCHASE RIGHTS
The Committee may in its discretion determine that it shall be a term
and condition of one or more options exercised under the Plan that the Company
(or its assigns) shall have the right, exercisable upon the optionee's
separation from service with the Company and its subsidiaries, to repurchase any
or all of the shares of Common Stock previously acquired by the optionee upon
the exercise of such option. Any such repurchase right shall be exercisable upon
such terms and conditions (including the establishment of the appropriate
vesting schedule and other provisions for the expiration of such right in one or
more installments) as the Committee may specify in the instrument evidencing
such right. The Committee shall also have full power and authority to provide
for the automatic termination of these repurchase rights, in whole or in part,
and thereby accelerate the vesting of any or all of the purchased shares.
ARTICLE THREE
AUTOMATIC OPTION GRANT PROGRAM
I. GRANTS
A. Automatic Option Grants. Non-employee members of the Board will
automatically be granted Non-Qualified Options to purchase the number of shares
of Common Stock set forth below (subject to adjustment under Section III(C) of
Article One of this Plan) on the dates and pursuant to the terms set forth below
("Automatic Option Grants").
B. Continuing Directors. On the date of each Annual Shareholders
Meeting of the Company held after the Effective Date of this Plan, each
continuing non-employee member of the Board will receive an Automatic Option
Grant to purchase 4,000 shares of Common Stock; provided, however, that an
individual who has not served as a non-employee member of the Board for the
immediately preceding 180 days will not receive such a grant.
C. New Directors. Each individual person who is newly elected or
appointed as a non-employee member of the Board on or after the Effective Date
of this Plan will receive, on the effective date of such election or
appointment, an Automatic Option Grant to purchase 15,000 shares of Common
Stock.
II. TERMS
The terms applicable to each Automatic Option Grant will be as follows:
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A. Price. The option price per share will be equal to 100% of the Fair
Market Value of a share of Common Stock on the date of grant.
B. Option Term. Each Automatic Option Grant will have a maximum term of
10 years measured from the automatic grant date.
C. Exercisability. Each Automatic Option Grant will become exercisable
for all Automatic Option Grant shares 1 year after the automatic grant date,
provided the optionee continues to serve as a Board member throughout that
1-year period.
D. Payment. Upon exercise of the option, the option price for the
purchased shares will become payable immediately in one or more of the following
alternative forms: cash, shares of Common Stock held for the requisite period to
avoid a charge to the Company's reported earnings and valued at Fair Market
Value on the Exercise Date (as defined below), or pursuant to a sale and
remittance procedure under which the option holder delivers a properly executed
exercise notice together with irrevocable instructions to a broker to promptly
deliver to the Company the amount of sale proceeds to pay the option price. For
these purposes, the Exercise Date shall be the date on which written notice of
the exercise of the option is delivered to the Company. Except to the extent the
sale and remittance procedure specified above is utilized for the exercise of
the option, payment of the exercise price for the purchased shares must
accompany the notice.
E. Effect of termination of Board Membership.
(1) Should the optionee cease to be a Board member for any
reason (other than death) while holding one or more Automatic Option Grants,
then the optionee will have 6 months following the date of such cessation of
Board membership in which to exercise each such option for any or all of the
shares of Common Stock for which the option is exercisable at the time Board
membership ceases; provided however, that in no event may such an option be
exercised after the expiration of its 10-year term.
(2) Should the optionee die while holding one or more
Automatic Option Grants, then each such option may subsequently be exercised,
for any or all of the shares of Common Stock for which the option is exercisable
at the time of the optionee's death, by the personal representative of the
optionee's estate or by the person or persons to whom the option is transferred
pursuant to the optionee's Will or in accordance with the laws of descent and
distribution. Any such exercise must, however, occur before the earlier of (i)
the expiration of the option's 10-year term, or (ii) 12 months after the date of
the optionee's death.
F. Acceleration. Automatic Option Grants will be subject to
acceleration and termination in the event of a Corporate Transaction as
described in Article Two, Section III.A. of this Plan.
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G. Hostile Takeover. Automatic Option Grants will be granted in tandem
with limited stock appreciation rights, as described in the Hostile Takeover
provisions contained in Article Two, Section III.B. of this Plan.
ARTICLE FOUR
MISCELLANEOUS
I. AMENDMENT OF THE PLAN
A. General Rules. The Board shall have complete and exclusive power and
authority to amend or modify the Plan in any or all respects whatsoever.
However, no such amendment or modification shall, without the consent of the
option holders, adversely affect rights and obligations with respect to options
at the time outstanding under the Plan. In addition, the Board shall not,
without the approval of the Company's shareholders, (1) materially increase the
maximum number of shares issuable under the Plan (except to make permissible
adjustments related to changes in the Common Stock issuable under the Plan and
designed to preclude the enlargement or dilution of rights and benefits under
the Plan), (2) materially modify the eligibility requirements for the grant of
options under the Plan, or (3) otherwise materially increase the benefits
accruing to participants under the Plan.
B. Automatic Option Grants. Amendment of the Automatic Option Grant
provisions of this Plan is subject to the requirements outlined above. In
addition, the Automatic Option Grant provisions of this Plan may not be amended
more than once every 6 months, other than to comport with changes in the
Internal Revenue Code or rules thereunder.
C. Amendment of Options. The Committee shall have full power and
authority to modify or waive any or all of the terms, conditions or restrictions
applicable to any outstanding option, to the extent not inconsistent with the
Plan; provided, however, that no such modification or waiver shall (1) without
the consent of the option holder, adversely affect the holder's rights
thereunder or (2) affect any outstanding option granted pursuant to the
Automatic Option Grant provisions of this Plan except to the extent necessary to
conform to any amendment to this Plan.
II. TAX WITHHOLDING
A. Obligation. The Company's obligation to deliver shares or cash upon
the exercise of stock options or stock appreciation rights granted under the
Plan is subject to the satisfaction of all applicable Federal, State and local
income and employment tax withholding requirements.
B. Stock Withholding. The Plan Administrator may, in its discretion and
upon such terms and conditions as it may deem appropriate (including the
applicable safe-harbor provisions of SEC Rule 16b-3) provide any or all holders
of outstanding option grants under the Plan with
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the election to have the Company withhold, from the shares of Common Stock
otherwise issuable upon the exercise of such options, one or more of such shares
with an aggregate fair market value equal to the designated percentage (any
multiple of 5% specified by the optionee) of the Federal and State income taxes
("Taxes") incurred in connection with the acquisition of such shares. In lieu of
such direct withholding, one or more optionees may also be granted the right to
deliver shares of Common Stock to the Company in satisfaction of such Taxes. The
withheld or delivered shares shall be valued at the Fair Market Value on the
applicable determination date for such Taxes or such other date required by the
applicable safe-harbor provisions of SEC Rule 16b-3.
III. EFFECTIVE DATE AND TERM OF PLAN
A. Implementation. This Plan, as successor to the Company's 1983 Stock
Option Plan, shall become effective as of the Effective Date, and no further
option grants shall be made under the 1983 Plan on or after the Effective Date
of this Plan. Any options granted on the basis of the 208,020-share increase
authorized by this Plan shall not become exercisable in whole or in part unless
such share increase is approved by the Company's shareholders. If such
shareholder approval is not obtained within twelve (12) months after the
Effective Date of the Plan, then all options granted on the basis of such
208,020-share increase shall terminate without ever becoming exercisable for the
option shares, and no further option grants shall be made on the basis of such
share increase. Subject to the foregoing limitations, options may be granted
under this Plan at any time from and after the Effective Date of the Plan and
before the date fixed herein for termination of the Plan.
B. Termination. Unless sooner terminated due to a Corporate Transaction
or a Change in Control, the Plan will terminate upon the earlier of (i) October
8, 2003, or (ii) the date on which all shares available for issuance under the
Plan have been issued or cancelled pursuant to exercise, surrender or cash-out
of options. If the date of termination is determined under clause (i) above,
then options outstanding on such date shall thereafter continue to have force
and effect in accordance with the provisions of the instruments evidencing those
options.
C. Additional Shares. Options may be granted under this Plan to
purchase shares of Common Stock in excess of the number of shares then available
for issuance under the Plan, provided each option granted is not to become
exercisable, in whole or in part, at any time prior to shareholder approval of
an amendment authorizing a sufficient increase in the number of shares issuable
under the Plan.
III. USE OF PROCEEDS
Any cash proceeds received by the Company from the sale of shares
pursuant to options granted under the Plan shall be used for general corporate
purposes.
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IV. REGULATORY APPROVALS
The implementation of the Plan, the granting of any option under the
Plan, and the issuance of stock upon the exercise or surrender of any such
option shall be subject to the procurement by the Company of all approvals and
permits required by regulatory authorities having jurisdiction over the Plan,
the options granted under it and the stock issued pursuant to it.
V. NO EMPLOYMENT/SERVICE RIGHTS
Neither the establishment of this Plan, nor any action taken under the
terms of this Plan, nor any provision of this Plan shall be construed so as to
grant any individual the right to remain in the employ or service of the Company
(or any parent or subsidiary corporation) for any period of specific duration,
and the Company (or any parent or subsidiary corporation retaining the services
of such individual) may terminate such individual's employment or service at any
time and for any reason, with or without cause.