EXHIBIT 4.1
NORTHERN OSTRICH CORP.
2003 STOCK OPTION PLAN
1. PURPOSE.
The Purpose of the NORTHERN OSTRICH CORP. 2003 Stock Option Plan ("Plan") is to
provide to key employees, officers, directors, consultants and agents of
NORTHERN OSTRICH CORP. (the "Corporation"), or any of its subsidiaries, added
incentive for high levels of performance and to reward unusual efforts which
increase the earnings and long-term growth of the Corporation. It is intended to
accomplish the foregoing by providing for the grant of "Incentive Stock Options"
and "Nonqualified Stock Options" to qualified eligible individuals. Except where
the context otherwise requires, the term "Corporation" shall include NORTHERN
OSTRICH CORP., a Nevada corporation, any parent of the corporation and all
present and future subsidiaries of the Corporation as defined in Section 424(e)
and 424(f) of the Internal Revenue Code of 1986, as amended (the "Code").
2. CERTAIN DEFINITIONS.
As used in this Plan, the following words and phrases shall have the respective
meanings set forth below, unless the context clearly indicates a contrary
meaning.
(a) "Board of Directors" shall mean the Board of Directors of the
Corporation.
(b) "Cause" shall mean any one or more of the following:
(i) a material breach of any term of employment, consultation or
engagement with the Corporation by the Optionee.
(ii) the continuing, repeated willful failure or refusal by the
Optionee to substantially perform his responsibilities on
behalf of the Corporation.
(iii) an act or omission of the Optionee that is materially adverse
to the business, goodwill or reputation of the Corporation.
(iv) an act of dishonesty.
(v) the commission of a felony.
(vi) the breach of a fiduciary duty or fraud.
(vii) an act of moral turpitude.
(viii) a determination by a physician licensed in the jurisdiction
wherethe Optionee is employed that the Optionee is a chronic
alcoholic or a narcotics addict (as such term is defined under
the applicable law of such jurisdiction), or
(ix) any "cause" for termination or discharge as may be otherwise
defined in any employment, consultation or engagement
agreement between the Optionee and the Corporation.
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The determination of the Option Committee with respect to whether a
Termination for Cause has occurred shall be submitted to the Board of
Directors, whose decision shall be final and conclusive.
(c) "Change of Control" shall mean (i) an acquisition of any voting
securities of the Corporation (the "Voting Securities") by any "Person"
(as the term person is used for purposes of Section 13(d) or 14(d) of
the Exchange Act), immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of thirty percent (30%) or more of the then outstanding
shares or the combined voting power of the Corporation's then
outstanding Voting Securities; (ii) the individuals who, as of the
Effective Date are members of the Board (the "Incumbent Board"), cease
for any reason to constitute at least two-thirds of the members of the
Board; provided, however, that if the election, or nomination of the
members of the Corporation's common stockholders, of any new director
was approved by a vote of at least two-thirds of the Incumbent Board,
such new director shall, for purposes of this Plan, be considered as a
member of the Incumbent Board; (iii) the consummation of (x) a merger,
consolidation or reorganization with or into the Corporation or in
which securities of the Corporation are issued unless such merger,
consolidation or reorganization is a "Non-Control Transaction"; (iv) a
complete liquidation or dissolution of the Corporation; or (v) the sale
or other disposition of all or substantially all of the assets of the
Corporation to any Person (other than a transfer to a Subsidiary or the
distribution to the Corporation's stockholders of the stock of a
Subsidiary or any other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired
Beneficial Ownership of more than the permitted amount of the then
outstanding Shares or Voting Securities as a result of the acquisition
of Shares or Voting Securities by the Corporation which, by reducing
the number of Shares or Voting Securities then outstanding, increases
the proportional number of shares Beneficially Owned by the Subject
Persons, provided that if a Change in Control would occur (but for the
operation of this sentence) as a result of the acquisition of Shares or
Voting Securities by the Corporation, and after such share acquisition
by the Corporation, the Subject Person becomes the Beneficial Owner of
any additional Shares or Voting Securities which increases the
percentage of the then outstanding Shares or Voting Securities
Beneficially Owned by the Subject Person, then a Change in Control
shall occur.
(d) "Disability" shall mean the inability to engage in any substantial
gainful activity by reason of any medically determined physical or
mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less
than twelve (12) months as determined by the Option Committee in their
sole discretion.
(e) "Effective Date" shall mean the date on which the Plan is approved by a
majority of the outstanding shares of capital stock of the Corporation
entitled to vote thereon.
(f) "Exchange Act" shall mean the Securities and Exchange Act of 1934, as
amended.
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(g) "Fair Market Value per Share" shall mean as of any date the fair market
value of each of the Shares on such date (the "applicable date") as
determined by the Option Committee in good faith. The Option Committee
is authorized to make its determination as to the fair market value on
the following basis: (i) if the Shares are not traded on a securities
exchange and are not quoted on the National Association of Securities
Dealers, Inc.'s Automated Quotation System ("NASDAQ"), but are quoted
on the Over The Counter Electronic Bulletin Board operated by NASDAQ,
"Fair Market Value per Share" shall be the mean between the average
daily bid and average daily asked prices of the Shares on the
applicable date, as published on such bulletin board; (ii) if the
Shares are not traded on a securities exchange and are quoted on
NASDAQ, "Fair Market Value per Share" shall be the closing transaction
price of the Shares on the applicable date, as reported on NASDAQ;
(iii) if the Shares are traded on a securities exchange, "Fair Market
Value per Share" shall be the daily closing price of the Shares, on
such securities exchange as of the applicable date; or (iv) if the
Shares are traded other than as described in (i), (ii) or (iii) above,
or if the Shares are not publicly traded, "Fair Market Value per Share"
shall be the value determined by the Option Committee in good faith
based upon the fair market value as determined by completely
independent and well qualified experts. In the case of Shares described
in (i), (ii) or (iii) above, if no prices are reported for the Shares
on the applicable date, the "Fair Market Value per Share" shall be the
price reported for such Shares on the next preceding date on which
there were reported prices.
(h) "Granting Date" shall mean the date on which the grant of an Option is
made effective by the Option Committee.
(i) "Incentive Stock Option" shall mean an Option intended to qualify for
treatment as an incentive stock option under Section 422 of the Code,
and designated as an Incentive Stock Option.
(j) "Non-Control Transaction" shall mean a merger, consolidation or
reorganization with or into the Corporation or in which securities of
the Corporation are issued where:
a. the stockholders of the Corporation, immediately before such
merger, consolidation or reorganization, own directly or
indirectly immediately following such merger, consolidation or
reorganization, at least fifty percent (50%) of the combined
voting power of the outstanding voting securities of the
corporation resulting from such merger or consolidation or
reorganization (the "Surviving Corporation") in substantially
the same proportion as their ownership of the Voting
Securities immediately before such merger, consolidation or
reorganization,
b. the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement providing
for such merger, consolidation or reorganization constitute at
least two-thirds of the members of the board of directors of
the Surviving Corporation, or a corporation beneficially
directly or indirectly owning a majority of the Voting
Securities of the Surviving Corporation, and
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c. no Person other than (1) the Corporation, (2) any Subsidiary,
(3) any employee benefit plan (or any trust forming a part
thereof) that, immediately prior to such merger, consolidation
or reorganization, was maintained by the Corporation or any
Subsidiary, or (4) any Person who, immediately prior to such
merger, consolidation or reorganization had Beneficial
Ownership of thirty percent (30%) or more of the then
outstanding Voting Securities or Shares, has Beneficial
Ownership of thirty percent (30%) or more of the combined
voting power of the Surviving Corporation's then outstanding
voting securities or its common stock.
(k) "Nonqualified Stock Option" shall mean an Option not qualifying as an
Incentive Stock Option.
(l) "Option" shall man any option to purchase Shares of the Corporation
granted under the Plan, which may be either an Incentive Stock Option
or a Nonqualified Stock Option.
(m) "Option Agreement" shall mean the document setting forth the terms and
conditions of each Option.
(n) "Option Committee" shall mean the Committee selected and designated by
the Board of Directors to administer the Plan, consisting of not less
than two (2) members of the Board of Directors and if there is only one
member of the Board of Directors, then such member.
(o) "Optionee" shall mean the holder of an Option.
(p) "Retirement" shall have the meaning ascribed by the Option Committee.
(q) "Securities Act" shall mean the Securities Act of 1933, as amended.
(r) "Shares" shall mean the shares of common stock, $0.001 par value per
share of the Corporation.
(s) "Subsidiary" shall mean any corporation (other than NORTHERN OSTRICH
CORP.) in an unbroken chain of corporations beginning with NORTHERN
OSTRICH CORP., if each of the corporations other than the last
corporation in the unbroken chain owns stock possessing 50% or more of
the total combined voting power of all classes of stock in one of the
other corporations in such chain.
(t) "Ten Percent Shareholder" shall mean an individual who, at the time an
Option is granted, owns stock possessing more than 10% of the total
combined voting power of all classes of stock of the Corporation or its
parent, if any.
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3. STOCK OPTIONS.
(a) In General. Awards under the Plan shall be granted in the form of
Options which may either qualify for treatment as Incentive Stock
Options or as Nonqualified Stock Options.
(b) Limitation on Number of Shares. The aggregate number of Shares which
may be issued and purchased under the Plan shall not exceed 335,000
Shares, subject to any Share adjustments pursuant to Section 9. Shares
may be either authorized and unissued Shares or issued Shares
reacquired by the Corporation. The total number of Shares subject to
Options authorized under the Plan shall be subject to increase or
decrease, as necessary, in order to give effect to the adjustment
provisions of Section 9 hereof and to give effect to any amendment
adopted as provided in Section 15 hereof. Notwithstanding the above
limitation, any Shares subject to an Option which terminates, is
cancelled or expires for any reason without being exercised in full,
may again be subject to an Option under the Plan, unless the Plan shall
have been terminated. At the discretion of the Option Committee,
existing Options may be cancelled and new options granted at a lower
price in the event of a decline in the market value of the Shares. If
Shares issued upon exercise of an Option under the Plan are tendered to
the Corporation in partial or full payment of the exercise price of an
Option granted under the Plan, such tendered Shares shall not be
available for subsequent Option grants under the Plan.
4. ELIGIBILITY.
(a) In General. Only officers, key employees and directors who are also
employees of the Corporation shall be eligible to receive grants of
Incentive Stock Options. Officers, key employees, consultants, agents
and all directors of the Corporation (whether or not employees of the
Corporation) shall be eligible to receive grants of Nonqualified Stock
Options. Within the foregoing limits, the Option Committee, in its sole
and absolute discretion, shall, from time to time, determine (i) the
individuals or the class of individuals to whom Options may be granted
hereunder, (ii) the number of Shares to be covered by each of the
Options granted hereunder, (iii) the purchase price of the Shares and
the method of payment for such Shares, (iv) the terms and provisions of
the respective Option Agreement and (v) the times at which such Options
shall be granted. The Option Committee shall take into account such
factors as it shall deem relevant in connection with accomplishing the
purpose of the Plan as set forth in Section 1 hereof. All such
determinations and designations of individuals eligible to receive
Options under the Plan shall be made in the absolute discretion of the
Option Committee and shall not require the approval of the
stockholders, except as expressly set forth herein.
(b) Additional Options. An individual who has been granted an Option may be
granted additional Options if the Option Committee shall so determine.
In addition, new Options may be granted in substitution for Options
previously granted under this Plan or another plan of the Corporation
or under the plan of another corporation assumed by the Corporation. No
Options shall be granted under this Plan after the expiration of the
tenth (10th) anniversary of the adoption of the Plan by the Board of
Directors.
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(c) Certain Limitations. Incentive Stock Options may not be granted to an
Optionee to the extent that the aggregate Fair Market Value per Share
(determined as of the Granting Date) of all Shares subject to the
Incentive Stock Options granted under the Plan (or granted under any
other incentive stock option plan of the Corporation) which are
exercisable for the first time by such Optionee during the same
calendar year exceeds One Hundred Thousand Dollars ($100,000).
(d) Option Agreement. Each Option granted pursuant to the Plan shall be
evidenced by a written Option Agreement entered into between the
Corporation and the Optionee which shall contain such terms and
provisions, including, but not limited to, the period of exercise,
whether in installments or otherwise, the exercise price and such other
terms and conditions as the Option Committee shall, in its sole
discretion, determine to be appropriate and within the contemplation of
the Plan. The terms and conditions of such written Option Agreement
need not be the same for all Options granted under the Plan.
5. ADMINISTRATION OF PLAN.
(a) Option Committee. This Plan shall be administered by the Option
Committee, subject to the approval and ratification by the Board of
Directors. Any action of the Option Committee with respect to
administration of the Plan shall be taken pursuant to (i) a majority
vote at a meeting of the Option Committee (to be documented by
minutes), or (ii) the unanimous written consent of its members. The
Option Committee may meet in person, by telephone, or by any other
means which it deems to be advisable and convenient. All actions taken
by the Option Committee shall be submitted to the Board of Directors
for ratification and approval.
(b) Vacancies. Vacancies in the Option Committee shall be filled by the
Board of Directors. In addition, the Board of Directors may at any time
remove one or more members of the Option Committee and substitute
others, and a majority of disinterested members of the Board of
Directors shall at all times have the right to exercise any and all
rights and powers of the Option Committee.
(c) Authority. The Option Committee shall have the authority, exercisable
in its discretion, subject to express provisions of this Plan and
subject to the approval and ratification by the Board of Directors, to:
(i) construe and interpret the provisions of the Plan, decide all
questions and settle all controversies and disputes which may arise in
connection with the Plan; (ii) prescribe, amend and rescind rules and
regulations relating to the administration of the Plan; (iii) determine
the exercise price of the Shares covered by each Option granted
hereunder and the method of payment for such Shares, the individuals to
whom, and the time or times at which, any Option granted hereunder
shall be granted and exercisable, the number of Shares covered by each
Option granted hereunder, (iv) determine the terms and provisions of
the respective Option Agreements (which need not be identical); (v)
determine, in the case of employees, whether Options shall be Incentive
Stock Options or Nonqualified Stock Options; (vi) determine the
duration and purposes of leaves of absence which may be granted to
eligible individuals without constituting a termination of their
employment for purposes of the Plan; and (vii) make all other
determinations necessary or advisable for the administration of the
Plan. Determinations of the Option Committee on matters referred to in
this Section shall be conclusive and binding on all parties howsoever
concerned. With respect to Incentive Stock Options, the Option
Committee shall administer the Plan in compliance with the provisions
of Code Section 422 as the same may hereafter be amended from time to
time. No member of the Option Committee shall be liable for any action,
omission or determination made in good faith in connection with the
Plan.
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6. EXERCISE PRICE.
(a) Nonqualified Stock Options. The exercise price of each Option that is
intended to be a Nonqualified Stock Option shall be determined by the
Option Committee.
(b) Incentive Stock Option. The exercise price of each Option intended to
qualify as an Incentive Stock Option shall be determined by the Option
Committee, but shall in no event be less than one hundred percent
(100%) of the Fair Market Value per Share on the Granting Date of the
Incentive Stock Option. In the case of an Option intended to qualify
as an Incentive Stock Option, which is granted to a Ten Percent
Shareholder, the exercise price per share shall in no event be less
than 110% of the Fair Market Value per Share determined as of the
Granting Date.
7. PERIOD OF EXERCISE AND CERTAIN LIMITATIONS ON RIGHT TO EXERCISE.
(a) Period of Exercise. Each Option granted under the Plan shall be
exercisable at such times and under such conditions as may be
determined by the Option Committee at the Granting Date and as shall
be set forth in the Option Agreement; provided, however, in no event
shall an Option be exercisable after the expiration of ten (10) years
from its Granting Date, and in the case of an Incentive Stock Option
granted to a Ten Percent Shareholder, such Option shall not be
exercisable later than five (5) years after its Granting Date.
(b) Change of Control. Unless otherwise provided in any Option Agreement,
all Options granted pursuant to the Plan shall become fully and
immediately exercisable with respect to all Shares subject thereto,
upon a Change of Control.
(c) Effect of Termination of Employment or Other Relationship. The effect
of the termination of an Optionee's employment or other relationship
with the Corporation on such Optionee's eligibility to exercise any
Options awarded pursuant to the Plan shall be as follows:
i. Disability or Death. If an Optionee ceases to be employed by,
or ceases to have a relationship with, the Corporation by
reason of Disability or death, any Option heretofore granted
which remains unexercised at the time of termination shall
become fully vested and exercisable and shall expire not later
than one (1) year thereafter. During such one (1) year period
and prior to the expiration of the Option by its terms, the
Optionee, or his or her executor or administrator or the
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person or persons to whom the Option is transferred by will or
the applicable laws of descent and distribution, may exercise
such Option, and except as so exercised, such Option shall
expire at the end of one (1) year period unless such Option by
its terms expires before such date. The decision as to whether
a termination by reason of Disability has occurred shall be
made by the Option Committee, whose decision shall be final
and conclusive.
ii. Retirement. If the Optionee ceases to be employed by, or
ceases to have a relationship with the Corporation by reason
of Retirement, any Option heretofore granted which remains
unexercised at the time of such Retirement shall become fully
vested and exercisable and shall expire, in the case of an
Incentive Stock Option, not later than three (3) months
thereafter, or, in the case of a Nonqualified Stock Option,
not later than one (1) year thereafter. During such period and
prior to the expiration of the Option by its terms, such
Option may be exercised by the Optionee, and except as so
exercised, shall expire at the end of such relevant period
unless such Option by its terms expires before such date. The
decision as to whether a termination is by reason of
Retirement shall be made by the Option Committee, whose
decision shall be final and conclusive.
iii. Voluntary Termination or Termination by the Corporation. If an
Optionee's employment by, or relationship with, the
Corporation is terminated voluntarily or, by the Corporation,
whether such termination is for Cause or for no reason
whatsoever, any Option heretofore granted which remains
unexercised at the time of such termination shall expire
immediately, provided, however, that the Option Committee may,
in its sole and absolute discretion, within thirty (30) days
of such termination, waive the expiration of any Option
awarded under the Plan, by giving written notice of such
waiver to the Optionee at such Optionee's last known address.
In the event of such waiver, the Optionee may exercise any
such Options only to such extent, for such time, and upon such
terms and conditions set forth in subparagraph (i) above. The
determination as to whether a termination is voluntary or for
Cause shall be made by the Option Committee, whose decision
shall be final and conclusive.
(d) Shares held for Investment. The Option Committee may, if it or counsel
for the Corporation shall deem it necessary or desirable for any
reason, require as a condition of exercise, that the Optionee or any
other person entitled to exercise an Option hereunder, represent in
writing to the Corporation at the time of exercise of such Option that
it is their intention to acquire the Shares as to which the Option is
being exercised for investment purposes and not with a view to the
sale or distribution thereof.
(e) Transferability. Options granted under the Plan to an Optionee shall
not be transferable other than by will or the laws of descent and
distribution, and such Options shall be exercisable, during the
Optionee's lifetime, only by him or his legal guardian or legal
representative. A transfer of an Option by will or the laws of descent
and distribution shall not be effective unless the Option Committee
shall have been furnished with such evidence as it may deem necessary
to establish the validity of the transfer.
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(f) Intended Treatment as Incentive Stock Options. Incentive Stock Options
granted pursuant to this Plan are intended to qualify as "incentive
stock options" pursuant to Code Section 422 and shall, whenever
possible, be construed and administered so as to implement that intent.
If all or any part of an Option granted hereunder with the intention of
qualifying as an Incentive Stock Option, shall fail to so qualify, such
Option or portion thereof that fails to so qualify shall be deemed a
Nonqualified Stock Option granted hereunder.
8. PAYMENT OF EXERCISE PRICE AND CANCELLATION OF OPTIONS.
(a) Notice of Exercise. An Option granted under the Plan shall be exercised
by giving written notice to the Secretary of the Corporation (or such
other person designated by the Option Committee) of the Optionee's
intention to exercise one or more Options hereunder and by delivering
payment of the exercise price therewith, which shall be paid in full at
the time of such exercise.
(b) Method of Settlement. The consideration to be paid for the Shares to be
issued upon exercise of an Option, shall consist of cash or, with the
approval of the Option Committee (which may be withheld in its sole
discretion), Shares having a fair market value on the date of exercise,
as determined by the Option Committee, at least equal to the exercise
price or a combination of cash and Shares or, with the approval of the
Option Committee (which may be withheld in its sole discretion) may
also be effected wholly or partly by monies borrowed from the
Corporation pursuant to a promissory note, the terms and conditions of
which shall be determined from time to time by the Option Committee, in
its discretion, separately with respect to each exercise of Options and
each Optionee, or by such other method of payment as may be determined
by the Option Committee in its sole discretion; provided, that each
such method and time for payment and each such borrowing and terms and
conditions of repayment shall then be permitted by and be in compliance
with applicable law. An Optionee may purchase less than the total
number of Shares for which an Option is then exercisable, provided,
however, that any partial exercise of an Option may not be less than
for one hundred (100) Shares and shall not include any fractional
Shares. No Optionee or legal representative of an Optionee, as the case
may be, will be, or will be deemed to be, the owner of any Shares
covered by an Option unless and until certificates for the Shares are
issued to the Optionee or such Optionee's representative under the
Plan.
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9. SHARE ADJUSTMENT.
If the outstanding Shares of the class then subject to this Plan are increased
or decreased, or are changed into or exchanged for a different number or kind of
shares or securities or other forms of property (including cash) or rights, as a
result of one or more reorganizations, recapitalizations, spin-offs, forward
stock splits, reverse stock splits, stock dividends or the like, appropriate
adjustments shall be made in the number and/or kind of Shares or securities or
other forms of property (including cash) or rights for which Options may
thereafter be granted under the Plan and for which Options then outstanding
under the Plan may thereafter be exercised. Any such Share adjustments shall be
made without changing the aggregate exercise price applicable to the unexercised
portions of outstanding Options. Any fractional Shares resulting from such
adjustment shall be eliminated by rounding to the nearest whole number.
Appropriate amendments to the Option Agreements shall be executed by the
Corporation and the Optionees to the extent the Option Committee determines that
such amendments are necessary or desirable to reflect such Share adjustments. If
determined by the Option Committee to be appropriate, in the event of any Share
adjustment involving the substitution of securities of a corporation other than
the Corporation, the Option Committee shall make arrangements for the assumption
by such other corporation of any Options then or thereafter outstanding under
the Plan, without any change in the total exercise price applicable to the
unexercised portion of the Options but with an appropriate adjustment to the
number of securities, kind of securities and exercise price for each of the
securities subject to the Options. The determination by the Option Committee as
to what adjustment, amendments or arrangements shall be made pursuant to this
Section 9 and the extent thereof, shall be final and conclusive.
In the event of the proposed dissolution or liquidation of the Corporation, or a
proposed sale of substantially all of the assets of the Corporation, or in the
event of any merger or consolidation of the Corporation with or into another
corporation, or in the event of any corporate separation or division, including,
but not limited to, a split-up, split-off or spin-off, or other transaction in
which the outstanding Shares then subject to Options under the Plan are changed
into or exchanged for property (including cash), rights and/or securities other
than, or in addition to, shares of the Corporation, the Option Committee may
provide that the holder of each Option then exercisable shall have the right to
exercise such Option solely for the kind and amount of shares of stock and other
securities, property, cash or any combination thereof receivable upon such
dissolution, liquidation, sale, consolidation or merger, or similar corporate
event, by a holder of the number of Shares for which such Option might have been
exercised immediately prior to such dissolution, liquidation, sale,
consolidation or merger or similar corporate event; or, in the alternative, the
Option Committee may provide that each Option granted under the Plan shall
terminate as of a date to be fixed by the Board of Directors, provided, that no
less than thirty (30) days prior written notice of the date so fixed shall be
given to each Optionee who shall have the right, during such thirty (30) day
period preceding such termination, to exercise the Options as to all or any part
of the Shares covered thereby, including Shares as to which such Options would
not otherwise be exercisable.
10. SUBSTITUTE OPTIONS.
The Corporation may grant options under the Plan in substitution for options
held by employees of another corporation who become employees of the Corporation
as the result of a merger or consolidation of the employing corporation with the
Corporation, or as a result of the acquisition by the Corporation, of property
or stock of the employing corporation. The Corporation may direct that
substitute options be granted on such terms and conditions as the Board of
Directors considers appropriate in the circumstances.
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11. OTHER EMPLOYEE BENEFITS.
Except as to plans which by their terms include such amounts as compensation,
the amount of any compensation deemed to be received by an employee as a result
of the exercise of an option or the sale of Shares received upon such exercise
shall not constitute compensation for purposes of determining such employee's
benefits under any other employee benefit plan or program in which the employee
is a participant at any time, including, without limitation, benefits under any
bonus, pension, profit-sharing, life insurance or salary continuation plan,
except as otherwise specifically determined by the Board of Directors.
12. TERMS AND CONDITIONS OF OPTIONS.
(a) Withholding of Taxes. As a condition to the exercise, in whole or in
part, of any Options, the Option Committee may in its sole discretion
require the Optionee to pay, in addition to the exercise price of the
Shares covered by the Options an amount equal to any Federal, state or
local taxes that may be required to be withheld in connection with the
exercise of such Options. Alternatively, the Corporation may issue or
transfer the Shares pursuant to exercise of the Options net of the
number of Shares sufficient to satisfy the withholding tax
requirements. For withholding tax purposes, the Shares shall be valued
on the date the withholding obligation is incurred. In the event an
Optionee makes a Code Section 83(b) election in connection with a
Nonqualified Stock Option granted under the Plan, the Optionee shall
immediately notify the Corporation of such election. In the case of an
Incentive Stock Option, an Optionee who disposes of Shares acquired
pursuant to such Incentive Stock Option either (a) within two (2) years
after the Granting Date or (b) within one (1) year after the issuance
of such Shares to the Optionee upon exercise thereof, shall notify the
Corporation of such disposition and the amount realized upon such
disposition.
(b) No Rights to Continued Employment or Relationship. Nothing contained in
the Plan or in any Option Agreement shall obligate the Corporation to
continue to employ or to continue any other relationship with any
Optionee for any period or interfere in any way with the right of the
Corporation to reduce such Optionee's compensation or to terminate the
Corporation's employment or relationship with any Optionee at any time.
(c) Time of Granting Options. The Granting Date shall be the day the
Corporation executes the Option Agreement; provided, however, that if
appropriate resolutions of the Option Committee indicate that an Option
is to be granted as of and on some prior or future date, the Granting
Date shall be such prior or future date.
(d) Privileges of Stock Ownership. No Optionee shall be entitled to the
privileges of stock ownership as to any Shares not actually issued and
delivered to such Optionee. No Shares shall be issued upon the exercise
of any Option unless and until, in the opinion of the Corporation's
counsel, all applicable laws, rules and regulations of any governmental
or regulatory agencies and any exchanges upon which stock of the
Corporation may be listed, shall have been fully complied with.
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(e) Securities Law Compliance. The Corporation will diligently comply with
all applicable securities laws before any Options are granted under the
Plan and before any Shares are issued pursuant to the exercise of any
Options. Without limiting the generality of the foregoing, the
Corporation may require from the Optionee such investment
representation or such agreement, if any, as counsel for the
Corporation may consider necessary or advisable in order to comply with
the Securities Act as then in effect, and may require that the Optionee
agree that any sale of the Shares will be made only in such manner as
is permitted by the Option Committee. The Option Committee in its
discretion may cause the Options and Shares underlying such Options to
be registered under the Securities Act by the filing of a Form S-8
Registration Statement covering the Options and Shares. The Optionee
shall take any action reasonably requested by the Corporation in
connection with registration or qualification of the Shares under
federal and state securities laws.
(f) Option Agreement. Each Incentive Stock Option and Nonqualified Stock
Option granted under this Plan shall be evidenced by a written Option
Agreement executed by the Corporation and the Optionee containing such
terms and conditions as are deemed desirable by the Option Committee
and are not inconsistent with the purpose of the Plan as set forth in
Section 1.
13. RESTRICTED SHARES.
(a) In General. The Option Committee may, in its discretion, issue
restricted Shares upon the exercise of any Options granted under the
Plan. Such restricted Shares shall be subject to such vesting
requirements and restrictions on transferability as may be determined
by the Option Committee.
(b) Legend. All stock certificates issued with respect to restricted Shares
shall bear an appropriate legend referring to the terms, conditions,
and restrictions applicable to such Shares.
(c) Rights Appurtenant to Restricted Shares. The issuance of restricted
Shares shall not affect the rights of the Optionee as a stockholder of
the Corporation including, but not limited to the right to receive
dividends on and to vote with respect to such restricted Shares, except
that additional shares issued with respect to restricted Shares
including, but not limited to, stock dividends or stock splits or any
securities issued in exchange for restricted Shares shall be subject to
the same restrictions as are applicable to the restricted Shares.
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14. PLAN AMENDMENT AND TERMINATION.
(a) Authority of Option Committee. In addition to the authority of the
Option Committee set forth in Section 5, the Option Committee may at
any time discontinue granting Options under the Plan or otherwise
suspend, amend or terminate the Plan and may, with the consent of an
Optionee, make such modification of the terms and conditions of Options
theretofore granted as it shall deem advisable. Any amendment or
modification made pursuant to the provisions of this Section shall be
effective immediately upon adoption, unless otherwise provided therein,
subject to approval thereof (i) within twelve (12) months before or
after the effective date of such amendment or modification by
stockholders of the Corporation holding not less than a majority vote
of the voting power of the Corporation voting in person or by proxy at
a duly held stockholders meeting when required to maintain or satisfy
the requirements of Code Section 422 with respect to Incentive Stock
Options, or Code Section 162(m) with respect to performance-based
compensation, (ii) by any appropriate governmental agency if required,
or (iii) by a securities exchange or automated quotation system if
required. No Option may be granted during any suspension or after
termination of the Plan.
(b) Ten (10) Year Maximum Term. Unless previously terminated by the Option
Committee, this Plan shall terminate on the tenth (10th) anniversary of
the Effective Date. No Options shall be granted under the Plan
thereafter.
(c) Effect on Options Granted. Any amendment, suspension or termination of
the Plan shall not, without the consent of the Optionee, alter or
impair any rights or obligations under any Option theretofore granted.
15. EFFECTIVE DATE OF PLAN.
The Plan shall be effective upon the approval of the Board of Directors of the
Corporation (the "Effective Date").
16. MISCELLANEOUS PROVISIONS.
(a) Limitation on Benefits. No Option may be exercised, to the extent such
exercise will create an "excess parachute payment" as defined in
Section 280G of the Code.
(b) Exculpation and Indemnification. The Corporation shall indemnify and
hold harmless the Option Committee from and against any and all
liabilities, costs and expenses incurred by such persons as a result of
any act, or omission to act, in connection with the performance of such
persons' duties, responsibilities and obligations under the Plan, other
than such liabilities, costs and expenses as may result from gross
negligence, bad faith, willful conduct and/or criminal acts of such
persons.
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(c) Use of Proceeds. The proceeds from the exercise of Shares granted under
the Plan shall constitute and be considered as general funds of the
Corporation which may be used for any and all corporate purposes as
determined by the Board of Directors.
(d) Compliance with Applicable Laws. The inability of the Corporation to
obtain from any regulatory body having jurisdiction, the authority
deemed by the Corporation's counsel to be necessary to the lawful
issuance and sale of any Shares upon the exercise of an Option shall
relieve the Corporation of any liability in respect of the non-issuance
or sale of such Shares as to which requisite authority shall not have
been obtained.
(e) Non-Uniform Determinations. The Option Committee's determination under
the Plan (including without limitation determinations of the persons to
receive Options, the form, amount and timing of such Options, the terms
and provisions of such Options and the Option Agreements evidencing
same) need not be uniform and may be made by it selectively among
persons who receive, or are eligible to receive, Options under the
Plan, whether or not such persons are similarly situated.
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