EXHIBIT 4.2.3
GENEREX BIOTECHNOLOGY CORPORATION
2001 STOCK OPTION PLAN
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The purpose of the Generex Biotechnology Corporation 2001 Stock Plan
(the "Plan") is to provide (i) designated employees of Generex Biotechnology
Corporation (the "Company") and its subsidiaries, (ii) certain consultants and
advisors who perform services for the Company or its subsidiaries and (iii)
non-employee members of the Board of Directors of the Company (the "Board") with
the opportunity to receive grants of incentive stock options and nonqualified
stock options (collectively, "Options"). The Company believes that the Plan will
encourage the participants to contribute materially to the growth of the
Company, thereby benefiting the Company's stockholders, and will align the
economic interests of the participants with those of the stockholders.
1. Administration
(a) Committee. The Plan shall be administered and interpreted by the
Compensation Committee (the "Committee") of the Board, which consists of two or
more persons who are "outside directors" as defined under Section 162(m) of the
Internal Revenue Code of 1986, as amended (the "Code"), and related Treasury
regulations and "non-employee directors" as defined under Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). However, the
Board may ratify or approve any Option grants as it deems appropriate.
(b) Committee Authority. The Committee shall have the sole authority to
(i) determine the individuals to whom Options shall be granted under the Plan,
(ii) determine the type, size and terms of the Options to be made to each such
individual, (iii) determine the time when the Options will be granted and the
duration of any applicable exercise period, including the criteria for
exercisability and the acceleration of exercisability, (iv) amend the terms of
any previously issued Option and (v) deal with any other matters arising under
the Plan.
(c) Delegation. The Committee may delegate certain of its duties to one
or more of its members or to one or more agents as it may deem advisable. The
Committee may employ attorneys, agents, consultants, accountants or other
persons, and shall be entitled to rely upon the advice, opinions or valuations
of such persons.
(d) Committee Determinations. The Committee shall have full power and
authority to administer and interpret the Plan, to make factual determinations
and to adopt or amend such rules, regulations, agreements and instruments for
implementing the Plan and for the conduct of its business as it deems necessary
or advisable, in its sole discretion. The Committee's interpretations of the
Plan and all determinations made by the Committee pursuant to the powers vested
in it hereunder shall be conclusive and binding on all persons having any
interest in the Plan or in any awards granted hereunder. All powers of the
Committee shall be executed in its sole discretion, in the best interest of the
Company, not as a fiduciary, and in keeping with the objectives of the Plan and
need not be uniform as to similarly situated individuals.
2. Shares Subject to the Plan
(a) Shares Authorized. Subject to adjustment as described below, the
aggregate number of shares of common stock of the Company ("Company Stock") that
may be issued or transferred under the Plan or upon which awards under the Plan
may be granted is 4,000,000 shares. The maximum aggregate number of shares of
Company Stock that shall be subject to Options granted under the Plan to any
individual during any calendar year shall be 400,000 shares.. The shares may be
authorized but unissued shares of Company Stock or reacquired shares of Company
Stock, including shares purchased by the Company on the open market for purposes
of the Plan. If and to the extent Options granted under the Plan terminate,
expire, or are canceled, forfeited, exchanged or surrendered without having been
exercised, the shares subject to such Options shall again be available for
purposes of the Plan, unless otherwise provided by the Committee.
(b) Adjustments. If there is any change in the number or kind of shares
of Company Stock outstanding by reason of (i) stock dividend, spinoff,
recapitalization, stock split or combination or exchange of shares, (ii) merger,
reorganization or consolidation, (iii) reclassification or change in par value
or (iv) any other extraordinary or unusual event affecting the outstanding
Company Stock as a class without the Company's receipt of consideration, or if
the value of outstanding shares of Company Stock is substantially reduced as a
result of a spinoff or the Company's payment of an extraordinary dividend or
distribution, the maximum number of shares of Company Stock available under the
Plan, the maximum number of shares of Company Stock that any individual
participating in the Plan may be granted in any year, the number of shares
covered by outstanding Options, the kind of shares issued under the Plan, and
the price per share or the applicable market value of such Options may be
appropriately adjusted by the Committee to reflect any increase or decrease in
the number of, or change in the kind or value of, issued shares of Company Stock
to preclude, to the extent practicable, the enlargement or dilution of rights
and benefits under such Options; provided, however, that any fractional shares
resulting from such adjustment shall be eliminated. Any adjustments determined
by the Committee shall be final, binding and conclusive.
3. Eligibility for Participation
(a) Eligible Persons. All employees of the Company and its subsidiaries
("Employees") and members of the Board who are not Employees ("Non-Employee
Directors") shall be eligible to participate in the Plan. Consultants and
advisors who perform services for the Company or any of its subsidiaries ("Key
Advisors") shall be eligible to participate in the Plan if the Key Advisors
render bona fide services to the Company or its subsidiaries, the services are
not in connection with the offer and sale of securities in a capital-raising
transaction and the Key Advisors do not directly or indirectly promote or
maintain a market for the Company's securities.
(b) Selection of Optionees. The Committee shall select the Employees,
Non-Employee Directors and Key Advisors to receive Options and shall determine
the number of shares of Company Stock subject to a particular Option in such
manner as the Committee determines. Employees, Key Advisors and Non-Employee
Directors who receive Options under this Plan shall hereinafter be referred to
as "Optionees."
4. Granting of Options
(a) Option Agreements. All Options shall be subject to the terms and
conditions set forth herein and to such other terms and conditions consistent
with this Plan as the Committee deems appropriate and as are specified in
writing by the Committee to the individual in a grant instrument or an amendment
to the grant instrument (the "Option Agreement"). The Committee shall approve
the form and provisions of each Option Agreement.
(b) Number of Shares. The Committee shall determine the number of
shares of Company Stock that will be subject to each Option.
(c) Type of Option and Price.
(i) The Committee may grant Options that are intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Code ("Incentive Stock options") or Options that are not intended so to qualify
("Nonqualified Stock Options") or any combination of Incentive Stock Options and
Nonqualified Stock Options, all in accordance with the terms and conditions set
forth herein. Incentive Stock Options may be granted only to Employees of the
Company or a parent or subsidiary (within the meaning of Section 424(f) of the
Code). Nonqualified Stock Options may be granted to Employees, Non-Employee
Directors and Key Advisors. Unless otherwise provided in the Option Agreement,
any Option granted under this Plan to an Employee is intended to be an Incentive
Stock Option.
(ii) The purchase price (the "Exercise Price") of Company
Stock subject to an Option shall be determined by the Committee and may be equal
to or less than the Fair Market Value (as defined below) of a share of Company
Stock on the date the Option is granted; provided, however, that (x) the
Exercise Price of an Incentive Stock Option shall be equal to the Fair Market
Value of a share of Company Stock on the date the Incentive Stock Option is
granted and (y) an Incentive Stock Option may not be granted to an Employee who,
at the time of grant, owns stock possessing more than ten percent of the total
combined voting power of all classes of stock of the Company or any parent or
subsidiary of the Company, unless the Exercise Price per share is not less than
110% of the Fair Market Value of Company Stock on the date of grant.
(iii) The Fair Market Value per share shall be the closing
price of the Company Stock on the relevant date or (if there were no trades on
that date) the latest preceding date upon which a sale was reported.
(d) Option Term. The Committee shall determine the term of each Option.
The term of any Option shall not exceed ten years from the date of grant, which
date of grant is determined by the Committee. However, an Incentive Stock Option
that is granted to an Employee who, at the time of grant, owns stock possessing
more than ten percent of the total combined voting power of all classes of stock
of the Company, or any parent or subsidiary of the Company, may not have a term
that exceeds five years from the date of grant.
(e) Exercisability of Options. Options shall become exercisable in
accordance with such terms and conditions, consistent with the Plan, as may be
determined by the Committee and specified in the Option Agreement. Unless a
different vesting schedule is specified by the Committee in an Option Agreement,
Options granted under this Plan shall vest in one-half increments on each annual
anniversary of the date of grant over a period of two years. The Committee may
accelerate, and may provide in the Option Agreement for the acceleration of, the
exercisability of any or all outstanding Options at any time for any reason.
(f) Reload Options. In the event that shares of Company Stock are used
to exercise an Option, the terms of such Option may provide for the grant of
additional Options, or the Committee may grant additional Options, to purchase a
number of shares of Company Stock equal to the number of whole shares used to
exercise the Option and the number of whole shares, if any, withheld in payment
of any taxes. Such Options shall be granted with an Exercise Price equal to the
Fair Market Value of the Company Stock on the date of grant of such additional
Options, or at such other Exercise Price as the Committee may establish, for a
term not longer than the unexpired term of the exercised Option and on such
other terms as the Committee shall determine.
(g) Limit on Incentive Stock Options. Each Incentive Stock Option shall
provide that, if the aggregate Fair Market Value of the stock on the date of the
grant with respect to which Incentive Stock Options are exercisable for the
first time by an Optionee during any calendar year, under the Plan or any other
stock option plan of the Company or a parent or subsidiary, exceeds $100,000,
then the Option, as to the excess, shall be treated as a Nonqualified Stock
Option.
5. Termination of Employment, Disability or Death
(a) General Rule. Except as provided below, an Option may only be
exercised while the Optionee is employed by, or providing service to, the
Company as an Employee, Key Advisor or member of the Board. In the event that an
Optionee ceases to be employed by, or provide service to, the Company for any
reason other than (i) termination by the Company without Cause (as defined
below), (ii) voluntary termination by the Optionee, (iii) Disability (as defined
below) or (iv) death, any Option held by the Optionee shall terminate
immediately (unless the Committee specifies otherwise). In addition,
notwithstanding any other provision of this Plan, if the Committee determines
that the Optionee has engaged in conduct that constitutes Cause at any time
while the Optionee is employed by, or providing service to, the Company or after
the Optionee's termination of employment or service, any Option held by the
Optionee shall immediately terminate and the Optionee shall automatically
forfeit all shares underlying any exercised portion of an Option for which the
Company has not yet delivered the share certificates, upon refund by the Company
of the Exercise Price paid by the Optionee for such shares. Upon any exercise of
an Option, the Company may withhold delivery of share certificates pending
resolution of an inquiry that could lead to a finding resulting in a forfeiture.
(b) Termination Without Cause; Voluntary Termination. In the event that
an Optionee ceases to be employed by, or provide service to, the Company as a
result of (i) termination by the Company without Cause (as defined below) or
(ii) voluntary termination by the Optionee, any Option which is otherwise
exercisable by the Optionee shall terminate unless exercised within 90 days
after the date on which the Optionee ceases to be employed by, or provide
service to, the Company (or within such other period of time as may be specified
by the Committee), but in any event no later than the date of expiration of the
Option term. Except as otherwise provided by the Committee, any of the
Optionee's Options that are not otherwise exercisable as of the date on which
the Optionee ceases to be employed by, or provide service to, the Company shall
terminate as of such date.
(c) Termination Because Disabled. In the event the Optionee ceases to
be employed by, or provide service to, the Company because the Optionee is
Disabled, any Option which is otherwise exercisable by the Optionee shall
terminate unless exercised within one year after the date on which the Optionee
ceases to be employed by, or provide service to, the Company (or within such
other period of time as may be specified by the Committee), but in any event no
later than the date of expiration of the Option term. Except as otherwise
provided by the Committee, any of the Optionee's Options which are not otherwise
exercisable as of the date on which the Optionee ceases to be employed by, or
provide service to, the Company shall terminate as of such date.
(d) Death. If the Optionee dies while employed by, or providing service
to, the Company or within 90 days after the date on which the Optionee ceases to
be employed or provide service on account of a termination specified in Section
5(b) above (or within such other period of time as may be specified by the
Committee), any Option that is otherwise exercisable by the Optionee shall
terminate unless exercised within one year after the date on which the Optionee
dies or otherwise ceased to be employed by, or provide service to, the Company
(or within such other period of time as may be specified by the Committee), but
in any event no later than the date of expiration of the Option term. Except as
otherwise provided by the Committee, any of the Optionee's Options that are not
otherwise exercisable as of the date on which the Optionee dies or otherwise
ceased to be employed by, or provide service to, the Company shall terminate as
of such date.
(e) Definitions.
(i) The term "Company" shall mean the Company and its parent
and subsidiary corporations or other entities, as determined by the Committee.
(ii) "Employed by, or provide service to, the Company" shall
mean employment or service as an Employee, Key Advisor or member of the Board
(so that an Optionee shall not be considered to have terminated employment or
service until the Optionee ceases to be an Employee, Key Advisor and member of
the Board), unless the Committee determines otherwise.
(iii) "Disability" shall mean an Optionee's becoming disabled
under the Company's long-term disability plan, or, if the Optionee is not
covered under such plan or no such plan is maintained, and in the case of an
Incentive Stock Option, "Disability" shall mean an Optionee's becoming disabled
within the meaning of Section 22(e)(3) of the Code.
(iv) "Cause" shall mean, except to the extent specified
otherwise by the Committee, a finding by the Committee that the Optionee has:
(i) breached his or her employment or service contract with the Company; (ii)
engaged in disloyalty to the Company, including, without limitation, fraud,
embezzlement, theft, commission of a felony or proven dishonesty in the course
of his or her employment or service; (iii) disclosed trade secrets or
confidential information of the Company to persons not entitled to receive such
information; (iv) breached any written confidentiality, non-competition or
non-solicitation agreement between the Optionee and the Company; or (v) has
engaged in such other behavior detrimental to the interests of the Company as
the Committee determines.
6. Exercise of Options.
(a) Notice of Exercise. A Optionee may exercise an Option that has
become exercisable, in whole or in part, by delivering a notice of exercise to
the Company.
(b) Payment of Exercise Price. Along with the notice of exercise, the
Optionee shall pay the Exercise Price for an Option as specified by the
Committee (i) in cash, (ii) with the approval of the Committee, by delivering
shares of Company Stock owned by the Optionee (including Company Stock acquired
in connection with the exercise of an Option, subject to such restrictions as
the Committee deems appropriate) valued at Fair Market Value on the date of
exercise, (iii) with the approval of the Committee, by surrender of outstanding
awards under the Plan or (iv) by such other method as the Committee may approve.
Shares of Company Stock used to exercise an Option shall have been held by the
Optionee for the requisite period of time to avoid adverse accounting
consequences to the Company with respect to the Option.
(c) Payment of Tax. The Optionee shall pay the amount of any
withholding tax due at the time of exercise.
7. Deferrals
The Committee may permit or require an Optionee to defer receipt of the
delivery of shares that would otherwise be due to such Optionee in connection
with any Option. If any such deferral election is permitted or required, the
Committee shall, in its sole discretion, establish rules and procedures for such
deferrals.
8. Withholding of Taxes
(a) Required Withholding. All Options under the Plan shall be subject
to applicable federal (including FICA), state, local and other tax withholding
requirements. The Company shall have the right to deduct from any amounts paid
to the Optionee, any federal, state, local or other taxes required by law to be
withheld with respect to such Options. The Company may require that the Optionee
or other person receiving or exercising Options pay to the Company the amount of
any federal, state, local or other taxes that the Company is required to
withhold with respect to such Options, or the Company may deduct from other
wages paid by the Company the amount of any withholding taxes due with respect
to such Options.
(b) Election to Withhold Shares. If the Committee so permits, an
Optionee may elect, in the form and manner prescribed by the Committee, to
satisfy the Company's income tax withholding obligation with respect to Options
paid in Company Stock by having shares withheld up to an amount that does not
exceed the Optionee's minimum applicable withholding tax rate for federal
(including FICA), state, local and other tax liabilities.
9. Transferability of Options
(a) Nontransferability of Options. Except as provided below, only the
Optionee may exercise rights under an Option during the Optionee's lifetime. A
Optionee may not transfer those rights except (i) by will or by the laws of
descent and distribution or (ii) with respect to Nonqualified Stock Options, if
permitted in any specific case by the Committee, pursuant to a domestic
relations order or otherwise as permitted by the Committee. When an Optionee
dies, the personal representative or other person entitled to succeed to the
rights of the Optionee ("Successor Optionee") may exercise such rights. A
Successor Optionee must furnish proof satisfactory to the Company of his or her
right to receive the Option under the Optionee's will or under the applicable
laws of descent and distribution.
(b) Transfer of Nonqualified Stock Options. Notwithstanding the
foregoing, the Committee may provide that an Optionee may transfer Nonqualified
Stock Options to family members, or one or more trusts or other entities for the
benefit of or owned by family members, consistent with the applicable securities
laws, according to such terms as the Committee may determine; provided that the
Optionee receives no consideration for the transfer of an Option and the
transferred Option shall continue to be subject to the same terms and conditions
as were applicable to the Option immediately before the transfer.
10. Change of Control of the Company
As used herein, a "Change of Control" shall be deemed to have occurred
if:
(a) Unless the Board approves such acquisition, any "person" (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, in a single transaction or series of transactions, of securities
of the Company representing more than 20 percent of the voting power of the then
outstanding securities of the Company; provided that a Change of Control shall
not be deemed to occur as a result of a change of ownership resulting from the
death of a stockholder, and a Change of Control shall not be deemed to occur as
a result of a transaction in which the Company becomes a subsidiary of another
corporation and in which the stockholders of the Company, immediately prior to
the transaction, will beneficially own, immediately after the transaction,
shares entitling such stockholders to more than 20 percent of all votes to which
all stockholders of the parent corporation would be entitled in the election of
directors (without consideration of the rights of any class of stock to elect
directors by a separate class vote);
(b) A merger or consolidation of the Company is consummated with
another corporation where the stockholders of the Company, immediately prior to
the merger or consolidation, will not beneficially own, immediately after the
merger or consolidation, shares entitling such stockholders to more than 80
percent of all votes to which all stockholders of the surviving corporation
would be entitled in the election of directors (without consideration of the
rights of any class of stock to elect directors by a separate class vote);
(c) A sale or other disposition of all or substantially all of the
assets of the Company occurs;
(d) A liquidation or dissolution of the Company occurs; or
(e) Shares of the Company's Special Voting Rights Preferred Stock are
outstanding and a "Change of Control" under the terms and conditions of such
securities occurs.
11. Consequences of a Change of Control
(a) Notice and Acceleration. Unless the Committee determines otherwise,
any outstanding Options that are not yet exercisable or vested shall become
exercisable or vested as of the Change of Control. The Committee shall provide
notice to Optionees of the Change of Control as soon as practicable.
(b) Assumption of Options. Upon a Change of Control where the Company
is not the surviving corporation (or survives only as a subsidiary of another
corporation), unless the Committee determines otherwise, all outstanding Options
that are not exercised shall be assumed by, or replaced with comparable options
or rights by, the surviving corporation (or a parent or subsidiary of the
surviving corporation).
(c) Other Alternatives. Notwithstanding the foregoing, subject to
subsection (d) below, in the event of a Change of Control, the Committee may
take one or both of the following actions with respect to any or all outstanding
Options: (i) the Committee may require that Optionees surrender their
outstanding Options in exchange for a payment by the Company, in cash or Company
Stock as determined by the Committee, in an amount equal to the amount by which
the then Fair Market Value of the shares of Company Stock subject to the
Optionee's unexercised Options exceeds the Exercise Price of the Options; or
(ii) the Committee may, after giving Optionees an opportunity to exercise their
outstanding Options, terminate any or all unexercised Options at such time as
the Committee deems appropriate. Such surrender or termination or settlement
shall take place as of the date of the Change of Control or such other date as
the Committee may specify.
(d) Limitations. Notwithstanding anything in the Plan to the contrary,
in the event of a Change of Control, the Committee shall not have the right to
take any actions described in the Plan (including without limitation actions
described in subsection (c) above) that would make the Change of Control
ineligible for pooling of interests accounting treatment or that would make the
Change of Control ineligible for desired tax treatment if, in the absence of
such right or action, the Change of Control would qualify for such treatments
and the Company intends to use such treatments with respect to the Change of
Control.
12. Requirements for Issuance or Transfer of Shares
(a) Limitations on Issuance or Transfer of Shares. No Company Stock
shall be issued or transferred in connection with any Option hereunder unless
and until all legal requirements applicable to the issuance or transfer of such
Company Stock have been complied with to the satisfaction of the Committee. The
Committee shall have the right to condition any Option made to any Optionee
hereunder on such Optionee's undertaking in writing to comply with such
restrictions on his or her subsequent disposition of such shares of Company
Stock as the Committee shall deem necessary or advisable, and certificates
representing such shares may be legended to reflect any such restrictions.
Certificates representing shares of Company Stock issued or transferred under
the Plan will be subject to such stop-transfer orders and other restrictions as
may be required by applicable laws, regulations and interpretations, including
any requirement that a legend be placed thereon.
(b) Lock-Up Period. If so requested by the Company or any
representative of the underwriters (the "Managing Underwriter") in connection
with any underwritten offering of securities of the Company under the Securities
Act of 1933, as amended (the "Securities Act"), an Optionee (including any
successors or assigns) shall not sell or otherwise transfer any shares or other
securities of the Company during the 30-day period preceding and the 180-day
period following the effective date of a registration statement of the Company
filed under the Securities Act for such underwritten offering (or such shorter
period as may be requested by the Managing Underwriter and agreed to by the
Company) (the "Market Standoff Period"). The Company may impose stop-transfer
instructions with respect to securities subject to the foregoing restrictions
until the end of such Market Standoff Period.
13. Cancellation and Recission of Options
(a) Unless the Option Agreement specifies otherwise, the Committee may
cancel, rescind, suspend, withhold or otherwise limit or restrict any unexpired,
unpaid or deferred Options at any time if the Optionee is not in compliance with
all applicable provisions of the Option Agreement and the Plan, or if the
Optionee engages in any "Detrimental Activity." For purposes of this Section 16,
"Detrimental Activity" shall include: (i) the rendering of services for any
organization or engaging directly or indirectly in any business which is or
becomes competitive with the Company, or which organization or business, or the
rendering of services to such organization or business, is or becomes otherwise
prejudicial to or in conflict with the interests of the Company; (ii) the
disclosure to anyone outside the Company, or the use in other than the Company's
business, without prior written authorization from the Company, of any
confidential information or material, in violation of the Company's applicable
agreement with the Optionee or of the Company's applicable policy regarding
confidential information and intellectual property; (iii) the failure or refusal
to disclose promptly and to assign to the Company, pursuant to the Company's
applicable agreement with the Optionee or to the Company's applicable policy
regarding confidential information and intellectual property, all right, title
and interest in any invention or idea, patentable or not, made or conceived by
the Optionee during employment by the Company, relating in any manner to the
actual or anticipated business, research or development work of the Company, or
the failure or refusal to do anything reasonably necessary to enable the Company
to secure a patent where appropriate in the United States and in other
countries; (iv) activity that results in termination of the Optionee's
employment for cause; (v) a violation of any rules, policies, procedures or
guidelines of the Company, including (but not limited to) the Company's business
conduct guidelines; (vi) any attempt (directly or indirectly) to induce any
employee of the Company to be employed or perform services elsewhere or any
attempt (directly or indirectly) to solicit the trade or business of any current
or prospective customer, supplier or partner of the Company; (vii) the
Optionee's being convicted of, or entering a guilty plea with respect to, a
crime, whether or not connected with the Company; or (viii) any other conduct or
act determined to be injurious, detrimental or prejudicial to any interest of
the Company.
(b) Upon exercise, payment or delivery pursuant to an Option, the
Optionee shall certify in a manner acceptable to the Company that he or she is
in compliance with the terms and conditions of the Plan. In the event an
Optionee fails to comply with the provisions of paragraphs (a)(i)-(viii) of this
Section 13 prior to, or during the six months after, any exercise, payment or
delivery pursuant to an Award, such exercise, payment or delivery may be
rescinded within two years thereafter. In the event of any such rescission, the
Optionee shall pay to the Company the amount of any gain realized or payment
received as a result of the rescinded exercise, payment or delivery, in such
manner and on such terms and conditions as may be required, and the Company
shall be entitled to set-off against the amount of any such gain any amount owed
to the Optionee by the Company.
(c) The Committee, in its sole discretion, may grant to an Optionee, in
exchange for the surrender and cancellation of an Option previously granted to
the Optionee, a new Option in the same or different form and containing such
terms, including without limitation a price that is higher or lower than any
price provided in the award so surrendered or cancelled.
14. Amendment and Termination of the Plan
(a) Amendment. The Committee may amend or terminate the Plan at any
time; provided, however, that the Committee shall not increase the aggregate
number of shares of Company Stock that may be issued or transferred under the
Plan or upon which awards under the Plan may be granted, or otherwise materially
amend the Plan, without stockholder approval if such approval is required in
order to comply with the Code or applicable laws, or to comply with applicable
stock exchange requirements.
(b) Termination of Plan. No Incentive Stock Option may be granted more
than ten years from the Plan's effective date. The Plan may be terminated by the
Committee at any time.
(c) Termination and Amendment of Outstanding Options. A termination or
amendment of the Plan that occurs after an Option is made shall not materially
impair the rights of an Optionee unless the Optionee consents or unless the
Committee acts under Section 20(b). The termination of the Plan shall not impair
the power and authority of the Committee with respect to an outstanding Option.
Whether or not the Plan has terminated, an outstanding Option may be terminated
or amended under Section 20(b) or may be amended by agreement of the Company and
the Optionee consistent with the Plan.
(d) Governing Document. The Plan shall be the controlling document. No
other statements, representations, explanatory materials or examples, oral or
written, may amend the Plan in any manner. The Plan shall be binding upon and
enforceable against the Company and its successors and assigns.
15. Funding of the Plan
This Plan shall be unfunded. The Company shall not be required to
establish any special or separate fund or to make any other segregation of
assets to assure the payment of any Options under this Plan. In no event shall
interest be paid or accrued on any Option, including unpaid installments of
Options.
16. Rights of Participants
Nothing in this Plan shall entitle any Employee, Key Advisor,
Non-Employee Director or other person to any claim or right to be granted an
Option under this Plan. Neither this Plan nor any action taken hereunder shall
be construed as giving any individual any rights to be retained by or in the
employ of the Company or any other employment rights.
17. No Fractional Shares
No fractional shares of Company Stock shall be issued or delivered
pursuant to the Plan or any Option. The Committee shall determine whether cash,
other awards or other property shall be issued or paid in lieu of such
fractional shares or whether such fractional shares or any rights thereto shall
be forfeited or otherwise eliminated.
18. Headings
Section headings are for reference only. In the event of a conflict
between a title and the content of a Section, the content of the Section shall
control.
19. Effective Date of the Plan. Subject to approval by the Company's
stockholders, the Plan shall be effective as of May 4, 2001.
20. Miscellaneous
(a) Options in Connection with Corporate Transactions and Otherwise.
Nothing contained in this Plan shall be construed to (i) limit the right of the
Committee to grant Options under this Plan in connection with the acquisition,
by purchase, lease, merger, consolidation or otherwise, of the business or
assets of any corporation, firm or association, including Options to employees
thereof who become Employees of the Company, or for other proper corporate
purposes, or (ii) limit the right of the Company to grant stock options or make
other awards outside of this Plan. Without limiting the foregoing, the Committee
may grant an Option to an employee of another corporation who becomes an
Employee by reason of a corporate merger, consolidation, acquisition of stock or
property, reorganization or liquidation involving the Company or any of its
subsidiaries in substitution for a stock option or stock awards grant made by
such corporation. The terms and conditions of the substitute Options may vary
from the terms and conditions required by the Plan and from those of the
substituted stock incentives. The Committee shall prescribe the provisions of
the substitute grants.
(b) Compliance with Law. The Plan, the exercise of Options and the
obligations of the Company to issue or transfer shares of Company Stock under
Options shall be subject to all applicable laws and to approvals by any
governmental or regulatory agency as may be required. The Committee may revoke
any Option if it is contrary to law or modify an Option to bring it into
compliance with any valid and mandatory government regulation. The Committee may
also adopt rules regarding the withholding of taxes on payments to Optionees.
The Committee may, in its sole discretion, agree to limit its authority under
this Section.
(c) Governing Law. The validity, construction, interpretation and
effect of the Plan and Option Agreements issued under the Plan shall be governed
and construed by and determined in accordance with the laws of State of
Delaware, without giving effect to the conflict of laws provisions thereof.