1
EXHIBIT 10.12
FUNDEX GAMES, LTD.
1996 EMPLOYEE STOCK OPTION PLAN
1. PURPOSES OF THE PLAN. The purposes of this 1996 Employee Stock Option
Plan (the "PLAN") are to attract and retain the best available personnel, to
provide additional incentive to the Employees of the Company and its
Subsidiaries, to promote the success of the Company's business and to enable
the Employees to share in the growth and prosperity of the Company by providing
them with an opportunity to purchase stock in the Company.
Options granted hereunder may be either Incentive Stock Options or
Nonstatutory Stock Options, at the discretion of the Board and as reflected in
the terms of the written stock option agreement.
2. DEFINITIONS. As used herein, the following definitions shall apply:
(a) "AFFILIATE" shall mean any entity that directly, or indirectly
through one or more intermediaries, controls or is controlled by, or is
under common control with, the Company.
(b) "BOARD" shall mean the Board of Directors of the Company.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as amended
from time to time. References in the Plan to any section of the Code
shall be deemed to include any amendment or successor provisions to such
section and any regulations issued under such section.
(f) "COMMON STOCK" shall mean the Common Stock of the Company.
(e) "COMPANY" shall mean Fundex Games, Ltd., a Nevada corporation.
(f) "COMMITTEE" shall mean the Committee appointed by the Board in
accordance with Section 4(a) of the Plan, if one is appointed.
(g) "CONTINUOUS EMPLOYMENT" OR "CONTINUOUS STATUS AS AN EMPLOYEE"
shall mean the absence of any interruption or termination of employment
or service as an Employee by or to the Company or any Parent or
Subsidiary of the Company which now exists or is hereafter organized or
acquired by or acquires the Company. Continuous Employment shall not be
considered interrupted in the case of sick leave, military leave or any
other leave of absence approved by the Board or in the case of transfers
between locations of the Company or between the Company, its Parent, or
any of its Subsidiaries or its successors.
(h) "DISABILITY" shall mean the inability of the Optionee to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to
result in death or has lasted or can be expected to last for a continuous
period of not less than 12 months. In determining the Disability of an
Optionee, the Board may require the Optionee to furnish proof of the
existence of Disability and may .select a physician to examine the
Optionee. The final determination as to the Disability of the Optionee
shall be made by the Board.
2
(i) "DISINTERESTED PERSON" shall mean an administrator of the Plan
who, during the one year prior to service as an administrator of the
Plan, has not been granted or awarded and, during such service, is not
granted or awarded stock, stock options or stock appreciation rights
pursuant to the Plan or any other plan of the Company or any of its
Affiliates entitling the participants therein to acquire stock, stock
options or stock appreciation rights of the Company or any Affiliates,
except for any plan under which the award of stock, stock options or
stock appreciation rights is not subject to the discretion of any person
or persons. The term "DISINTERESTED PERSON" shall be interpreted in a
manner consistent with the meaning of such term under Rule 16b-3
promulgated by the Securities and Exchange Commission under the Exchange
Act.
(j) "EMPLOYEE" shall mean any person, including officers and
directors, employed by the Company, its Parent, any of its Subsidiaries
or its successors. A person shall not be deemed to be employed by the
Company merely because such person is a member of the Board of Directors
of the Company or a consultant to the Company.
(k) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(l) "INCENTIVE STOCK OPTION" shall mean an Option intended to
qualify as an incentive stock option within the meaning of Section 422 of
the Code.
(m) "NONSTATUTORY STOCK OPTION" shall mean an Option which is not an
Incentive Stock Option.
(n) "OPTION" shall mean a stock option granted pursuant to the Plan
evidencing the grant of a right to an Employee pursuant to the Plan to
purchase a specified number of Shares at a specified exercise price.
(o) "OPTION AGREEMENT" shall mean a written agreement substantially
in one of the forms attached hereto as Exhibit A, or such other form or
forms as the Board (subject to the terms and conditions of this Plan) may
from time to time approve, evidencing and reflecting the terms of an
Option.
(p) "OPTIONED STOCK" shall mean the Common Stock subject to an
Option.
(q) "OPTIONEE" shall mean an Employee who is granted an Option.
(r) "PARENT" shall mean a "parent corporation," whether now or
hereafter existing, as defined in Sections 424 (e) and (g) of the Code.
(s) "PLAN" shall mean this 1995 Stock Option Plan.
(t) "SHARE" or "SHARES" shall mean shares of the Common Stock, as
adjusted in accordance with Section 10 of the Plan.
(u) "STOCK PURCHASE AGREEMENT" shall mean an agreement substantially
in the form attached hereto as Exhibit B, or such other form or forms as
the Board (subject to the terms and conditions of this Plan) may from
time to time approve,
2
3
which is to be executed as a condition of purchasing Optioned Stock upon
exercise of an Option.
(v) "SUBSIDIARY" shall mean a subsidiary corporation, whether now or
hereafter existing, as defined in Sections 424(f) and (g) of the Code.
(w) "TERMINATION FOR CAUSE" shall mean termination of employment as
a result of (i) any act or acts by the Optionee constituting a felony
under any federal, state or local law; (ii) the Optionee's willful and
continued failure to perform the duties assigned to him or her as an
Employee, (iii) any material breach by the Optionee of any agreement with
the Company concerning his or her employment or other understanding
concerning the terms and conditions of employment by the Company; (iv)
dishonesty, gross negligence or malfeasance by the Optionee in the
performance of his or her duties as an Employee or any conduct by the
Optionee which involves a material conflict of interest with any business
of the Company or Affiliate; or (v) the Optionee's taking or knowingly
omitting to take any other action or actions in the performance of
Optionee's duties as an Employee without informing appropriate members of
management to whom such Optionee reports, which action or actions, in the
determination of the Board, have caused or substantially contributed to
the material deterioration in the business or financial condition of the
Company or any Affiliate, taken as a whole.
3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of Section 10 of
the Plan, the maximum aggregate number of Shares which may be optioned and sold
pursuant to the exercise of Options under the Plan is 250,000 Shares. The
Shares may be authorized, but unissued or reacquired Shares.
If an Option should expire or become unexercisable for any reason without
having been exercised in full or if the Company repurchases Shares from the
Optionee pursuant to the terms of a Stock Purchase Agreement, the unpurchased
or repurchased Shares, respectively, which were subject thereto shall, unless
the Plan shall have been terminated, return to the Plan and become available
for other Options under the Plan.
4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE. The Plan shall be administered by the Board. Members of
the Board who are eligible for Options or have been granted Options may vote on
any matters affecting the administration of the Plan or the grant of any
Options pursuant to the Plan, except that no such member shall act upon the
granting of an Option to himself or herself, but any such member may be counted
in determining the existence of a quorum at any meeting of the Board or
Committee during which action is taken with respect to the granting of Options
to him or her.
The Board may at any time appoint a Committee consisting of not less than
two persons to administer the Plan on behalf of the Board, subject to such
terms and conditions as the Board may prescribe. Members of the Committee shall
serve for such period of time as the Board may determine. From time to time the
Board may increase the size of the Committee and appoint additional members
thereto, remove members (with or without cause) and appoint new members in
substitution therefor, fill vacancies however caused, or remove all members of
the Committee and thereafter directly administer the Plan. In the event the
Company has a class of equity securities registered under Section 12 of the
Exchange Act and unless the Board
3
4
determines otherwise, from the effective date of such registration until six
months after the termination of such registration, all grants of Options to
persons subject to the provisions of Section 16(b) of the Exchange Act during
any and all periods of time when all members of the Board do not qualify as
Disinterested Persons shall be made by, or only in accordance with the
recommendations of, a Committee of two or more persons having full authority to
act in the matter and all of whom are Disinterested Persons.
(b) POWERS OF THE BOARD. Subject to the provisions of the Plan, the Board
shall have the authority, in its discretion: (i) to grant Incentive Stock
Options and Nonstatutory Stock Options; (ii) to determine, upon review of
relevant information and in accordance with Section 7 of the Plan, the fair
market value per Share; (iii) to determine the terms and conditions of vesting
of Options, the exercise price of the Options and the consideration to be paid
for shares upon the exercise of Options (which exercise price and consideration
shall be determined in accordance with Section 7 of the Plan); (iv) to
determine the Employees to whom, and the time or times at which, Options shall
be granted, and the number of Shares to be subject to each Option; (v) to
prescribe, amend and rescind rules and regulations relating to the Plan; (vi)
to determine the terms and provisions of each Option Agreement and each Stock
Purchase Agreement (each of which need not be identical with the terms of other
Options and Stock Purchase Agreements) and, with the consent of the holder
thereof, to modify or amend each Option and Stock Purchase Agreement; (vii) to
determine whether a stock repurchase agreement or other agreement will be
required to be executed by any Employee as a condition to the exercise of an
Option, and to determine the terms and provisions of any such agreement (which
need not be identical with the terms of any other such agreement) and, with the
consent of the Optionee, to amend any such agreement; (viii) to interpret the
Plan, the Option Agreements, the Stock Purchase Agreements or any agreement
entered into with respect to the grant or exercise of Options; (ix) to
authorize any person to execute on behalf of the Company any instrument
required to effectuate the grant of an Option previously granted by the Board
or to take such other actions as may be necessary or appropriate with respect
to the Company's rights pursuant to Options or agreements relating to the grant
or exercise thereof; and (x) to make such other determinations and establish
such other procedures as it deems necessary or advisable for the administration
of the Plan.
(c) EFFECT OF THE BOARD'S DECISION. All decisions, determinations and
interpretations of the Board shall be final and binding on all Optionee's and
any other holders of Options.
5. ELIGIBILITY. Options may be granted only to Employees (including
employees of the Company who are also directors of the Company). An Employee
who has been granted an Option may, if such Employee is otherwise eligible, be
granted additional Options.
6. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective as of
the date of the adoption of the Plan by the Company's Board of Directors
subject to the approval by the Company's shareholders within 12 months before
or after the date the Plan Is adopted; provided, however, that Options may be
granted pursuant to the Plan prior to such shareholder approval subject to
subsequent approval of the Plan by such shareholders. The Plan shall continue
in effect for a term of ten years unless sooner terminated in accordance with
the terms and provisions of the Plan.
4
5
7. OPTION PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The exercise price per Share for the Shares to be
issued pursuant to the exercise of a Nonstatutory Stock Option shall be not
less than 85% of the "fair market value" per Share, as described below. The
exercise price per Share for the Shares to be issued pursuant to the exercise
of an Incentive Option shall be the fair market value per Share. However, with
respect to both Incentive Stock Options and Nonstatutory Stock Options, the
exercise price shall be 110% of the fair market value per Share on the date of
grant in the case of any Optionee who, at the time the Option is granted, owns
stock (as determined under Section 424(d) of the Code) possessing more than 10%
of the total combined voting power of all classes of stock of the Company or
its Parent or Subsidiaries.
(b) FAIR MARKET VALUE. The fair market value per Share on the date of
grant shall be determined by the Board in its sole discretion, exercised in
good faith; provided, however, that where there is a public market for the
Common Stock, the fair market value per Share shall be the average of the
closing bid and asked prices of the Common Stock on the date of grant, as
reported in THE WALL STREET JOURNAL (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated Quotations
("NASDAQ") System), or, in the event the Common Stock is listed on a stock
exchange or on the NASDAQ Stock Market, the fair market value per Share shall
be the closing price on the exchange or on the NASDAQ Stock Market as of the
date of grant of the Option, as reported in THE WALL STREET JOURNAL.
(c) PAYMENT OF CONSIDERATION. The consideration to be paid for the Shares
to be issued upon exercise of an Option, including the method of payment, shall
be determined by the Board in its discretion on the date of grant and may
consist of cash, check, promissory notes or other forms of legally permitted
consideration if authorized by the Board in connection with the grant of an
Option.
8. OPTIONS.
(a) TERMS AND PROVISIONS OF OPTIONS. As provided in Section 4 of this Plan
and subject to any limitations specified herein, the Board shall have the
authority to determine the terms and provisions of any Option granted under the
Plan or any agreement required to be executed in connection with the grant or
exercise of an Option. Each Option granted pursuant to this Plan shall be
evidenced by an Option Agreement. Options granted under the Plan are
conditioned upon the Company obtaining any required permit or order from
appropriate governmental agencies, authorizing the Company to issue such
Options and Shares issuable upon exercise thereof.
(b) NUMBER OF SHARES. Each Option Agreement shall state the number of
Shares to which it pertains and whether such Option is intended to constitute
an Incentive Stock Option or a Nonstatutory Stock Option. The maximum number of
Shares which may be awarded as Options under the Plan during any calendar year
to any Optionee is 50,000 Shares. If an Option held by an Employee is canceled,
the canceled Option shall continue to be counted against the maximum number of
Shares for which Options may be granted to such Employee and any replacement
Option granted to such Employee shall also count against such limit.
(c) TERM OF OPTION. The term of each Option may be up to ten years
from the date of grant thereof, as determined by the Board upon the grant of
the Option and
5
6
specified in the Option Agreement, except that the term of an Incentive Stock
Option granted to an Employee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent of the total combined
voting power of all classes of stock of the Company or its Parent or
Subsidiaries, shall not exceed five years from the date of grant thereof.
(d) EXERCISE OF OPTION.
(i) PROCEDURE FOR EXERCISE; RIGHTS AS A SHAREHOLDER.
Any option shall vest and become exercisable at such times,
in such installments and under such conditions as may be
determined by the Board, specified in the Option Agreement
and as shall be permissible under the terms of the Plan,
including performance criteria with respect to the Company
and/or the Optionee, provided that each Option shall vest and
become exercisable at the rate of not less than 20% per year
over five years from the date such Option is granted. An
Option may be exercised in accordance with the provisions of
this Plan as to all or any portion of the Shares then
exercisable under an Option, from time to time during the
term of the Option. An Option may not be exercised for a
fraction of a Share.
An Option shall be deemed to be exercised when written
notice of such exercise has been given to the Company at its
principal business office in accordance with the terms of the
Option Agreement by the person entitled to exercise the
Option and full payment for the Shares with respect to which
the Option is exercised has been received by the Company,
accompanied by an executed Stock Purchase Agreement
(including the attachments thereto) substantially in the form
of Exhibit B hereto and as may be modified by the Board from
time to time, and any other agreements required by the terms
of the Plan and/or the Option Agreement. Full payment may
consist of such consideration and method of payment allowable
under Section 7 of the Plan. Until the Option is properly
exercised in accordance with the terms of this Section 8(d),
no right to vote or to receive dividends or any other rights
as a shareholder shall exist with respect to the Optioned
Stock. No adjustment shall be made for a dividend or other
right for which the record date is prior to the date the
Option is exercised, except as provided in Section 10 of the
Plan.
As soon as practicable after any proper exercise of an
Option in accordance with the provisions of the Plan, the
Company shall, without transfer or issue tax to the Optionee,
deliver to the Optionee at the principal executive office of
the Company or such other place as shall be mutually agreed
upon between the Company and the Optionee, a certificate or
certificates representing the Shares for which the Option
shall have been exercised. The time of issuance and delivery
of the certificate(s) representing the Shares for which the
Option shall have been exercised may be postponed by the
Company for such period as may be required by the Company,
with reasonable diligence, to comply with any applicable
listing requirements of any national or regional securities
exchange or any
6
7
law or regulation applicable to the issuance or delivery of
such Shares. No Option may be exercised unless the Plan has
been duly approved by the shareholders of the Company in
accordance with applicable law. Notwithstanding anything to
the contrary herein, the terms of a Stock Purchase Agreement
required to be executed and delivered in connection with the
exercise of an Option may require the certificate or
certificates representing the Shares purchased upon the
exercise of an Option to be delivered and deposited with the
Company as security for the Optionee's faithful performance
of the terms and conditions of his or her Stock Purchase
Agreement.
Exercise of an Option in any manner shall result in a
decrease in the number of Shares which thereafter may be
available, both for purposes of the Plan and for sale under
the Option, by the number of Shares as to which the Option is
exercised.
(ii) TERMINATION OF STATUS AS AN EMPLOYEE. If an
Optionee ceases to serve as an Employee for any reason other
than death or Disability, and thereby terminates his or her
Continuous Status As An Employee, to the extent that such
Optionee was entitled to exercise the Option at the date of
such termination, such Optionee shall have the right to
exercise the Option at any time within 30 days subsequent to
the last day of such Optionee's Continuous Status As An
Employee (unless at the time of grant of such Option the
Board specified a longer period, not to exceed 90 days),
PROVIDED, however, that no Option shall be exercisable after
the expiration of the term set forth in the Option Agreement.
To the extent that such Optionee was not entitled to exercise
the Option at the date of the terminating event, or if such
Optionee does not exercise such Option (which such Optionee
was entitled to exercise) within the time specified herein,
the Option shall terminate. In the event that an Optionee's
Continuous Status As An Employee terminates due to death or
Disability, to the extent that such Optionee was entitled to
exercise the Option at the date of such termination, the
Option may be exercised any time within 180 days subsequent
to the death or Disability of the Optionee (unless at the
time of grant of such Option the Board specified a longer
period, not to exceed one year), PROVIDED, however, that no
Option shall be exercisable after the expiration of the
Option term set forth in the Option Agreement. To the extent
that such Optionee was not entitled to exercise such Option
at the date of his or her termination due to death or
Disability or if such Option is not exercised (to the extent
it could be exercised) within the time specified herein, the
Option shall terminate.
(e) LIMIT ON VALUE OF OPTIONED STOCK. To the extent that the aggregate
fair market value (determined at the time an Incentive Stock Option is granted)
of the Shares with respect to which Incentive Stock Options are exercisable for
the first time by an Optionee during any calendar year under all incentive
stock option plans of the Company, its Parent or its Subsidiaries, if any,
exceeds $100,000, the Options in excess of such limit shall be treated as
Nonstatutory Stock Options.
7
8
(f) EXPIRATION OF OPTION. Notwithstanding any provision in the Plan,
including but not limited to the provisions set forth in this Section 8, an
Option may not be exercised, under any circumstances, after the expiration of
its term.
9. NONTRANSFERABILITY OF OPTIONS. Options granted under this Plan may not
be sold, pledged, assigned, hypothecated, gifted, transferred or disposed of in
any manner, either voluntarily or involuntarily by operation of law, other than
by will or by the laws of descent or distribution or as a transfer between
spouses incident to a "divorce" within the meaning of Section 1041(a) of the
Code, and any such attempt may result, at the discretion of the Board, in the
termination of such Options. During the lifetime of the Optionee, his or her
Option may be exercised only by such Optionee or his or her legal guardian.
10. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER.
(a) Subject to any required action by the shareholders of the Company, the
number of Shares covered by each outstanding Option, and the number of Shares
which have been authorized for issuance under the Plan but as to which no
Options have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an Option or repurchase of Shares from an
Optionee upon termination of employment or service, as well as the exercise
price per Share covered by each such outstanding Option, shall be
proportionately adjusted for any increase or decrease in the number of issued
Shares resulting from a stock split, reverse stock split, combination,
recapitalization or reclassification of the Common Stock, or the payment of a
stock dividend (but only on the Common Stock) or any other increase or decrease
in the number of issued shares of Common Stock effected without receipt of
consideration by the Company (other than stock bonuses to Employees or
directors); provided, however, that the conversion of any convertible
securities of the Company shall not be deemed to have been effected without the
receipt of consideration. Such adjustment shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. Except as
expressly provided herein, no issue by the Company of shares of stock of any
class, or securities convertible into shares of stock of any class, shall
affect, and no adjustment by reason thereof shall be made with respect to, the
number or price of Shares subject to the Plan or an Option.
(b) In the event of a proposed dissolution or liquidation of the Company
or the sale of all or substantially all of the assets of the Company (other
than in the ordinary course of business), or the merger, consolidation or
reorganization of the Company with or into another corporation as a result of
which the Company is not the surviving corporation or as a result of which the
outstanding Shares are exchanged for or converted into cash or property or
securities not of the Company, the Board shall (i) make provision for the
assumption of all outstanding Options by the successor corporation or a Parent
or a Subsidiary thereof, or (ii) declare that outstanding Options shall
terminate as of a date fixed by the Board which is at least thirty (30) days
after the notice thereof to the Optionee (unless such thirty (30) day period is
waived by the Optionee) and shall give each Optionee the right to exercise his
or her Option as to all or any part of the shares underlying such Option to the
extent then exercisable, provided such exercise does not violate Section
8(d)(ii) of the Plan.
(c) No fractional shares of Common Stock shall be issuable on account of
any action described in this Section, and the aggregate number of shares into
which Shares then covered by the Option, when changed as the result of such
action, shall be reduced to the largest number of whole shares resulting from
such action, unless the Board, in its sole
8
9
discretion, shall determine to issue scrip certificates in respect to any
fractional shares, which scrip certificates, in such event, shall be in a form
and have such terms and conditions as the Board in its discretion shall
prescribe.
11. TIME OF GRANTING OPTIONS. The date of grant of an Option shall, for
all purposes, be the date on which the Board makes the determination granting
such Option, PROVIDED, however, that if the Board determines that such grant
shall be as of some future date, the date of grant shall be such future date.
Notice of the determination shall be given to each Employee to whom an Option
is so granted within a reasonable time after the date of such grant.
12. AMENDMENT AND TERMINATION OF THE PLAN.
(a) AMENDMENT AND TERMINATION. The Board may amend or terminate the Plan
from time to time in such respects as the Board may deem advisable and shall
make any amendments which may be required so that Options intended to be
Incentive Stock Options shall at all times continue to be Incentive Stock
Options for the purpose of the Code, except that, without approval of the
holders of a majority of the shares of the Company's capital stock represented
or present and entitled to vote at a valid meeting of the Company's
shareholders at which action is taken on an amendment or revision, no such
amendment or revision shall:
(i) Increase the number of Shares subject to the Plan, other
than in connection with an adjustment under Section 10 of the Plan;
(ii) Materially change the designation of the
class of Employees eligible to be granted Options;
(iii) Remove the administration of the Plan from
the Board except to a Committee;
(iv) Materially increase the benefits accruing to
participants under the Plan; or
(v) Extend the term of the Plan.
(b) EFFECT OF AMENDMENT OR TERMINATION. Except as otherwise provided in
Section 10, any amendment or termination of the Plan shall not affect Options
already granted and such Options shall remain in full force and effect as if
this Plan had not been amended or terminated, unless mutually agreed otherwise
between the Optionee and the Company, which agreement must be in writing and
signed by the Optionee and the Company.
13. CONDITIONS UPON ISSUANCE OF SHARES.
(a) Shares shall not be issued pursuant to the exercise of an Option
unless the exercise of such Option and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Securities
Exchange Act of 1934, as amended, applicable state securities laws, the rules
and regulations promulgated thereunder, and the requirements of any
9
10
stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
(b) As a condition to the exercise of an Option, the Board may require the
person exercising such Option to execute an agreement with, and/or may require
the person exercising such Option to make any representation and warranty to,
the Company as may in the judgment of counsel to the Company be required under
applicable law or regulation, including but not limited to a representation and
warranty that the Shares are being purchased only for investment and without
any present intention to sell or to distribute such Shares if, in the opinion
of counsel for the Company, such a representation is appropriate under any of
the aforementioned relevant provisions of law.
14. RESERVATION OF SHARES. The Company, during the term of this Plan,
shall at all times reserve and keep available, such number of Shares as shall
be sufficient to satisfy the requirements of the Plan.
The Company, during the term of this Plan, shall use its best efforts to
seek to obtain from appropriate regulatory agencies any requisite authorization
in order to issue and to sell such number of Shares as shall be sufficient to
satisfy the requirements of the Plan. The inability of the Company to obtain
from any such regulatory agency having jurisdiction the requisite
authorization(s) deemed by the Company's counsel to be necessary for the lawful
issuance and sale of any Shares hereunder, or the inability of the Company to
confirm to its satisfaction that any issuance and sale of any Shares hereunder
will meet applicable legal requirements, shall relieve the Company of any
liability in respect to the failure to issue or to sell such Shares as to which
such requisite authority shall not have been obtained.
15. STOCK OPTION AND STOCK PURCHASE AGREEMENTS. Options shall be evidenced
by written Option Agreements in such form or forms as the Board shall approve
from time to time. Upon the exercise of an Option, the Optionee shall sign and
deliver to the Company a Stock Purchase Agreement in such form or forms as the
Board shall approve from time to time.
16. EFFECTIVE DATE AND TERM OF PLAN. The Plan shall become effective upon
shareholder approval as provided in Section 17 of the Plan. The Plan shall
continue in effect for a term of ten years unless sooner terminated under
Section 12 of the Plan.
17. SHAREHOLDER APPROVAL. Continuance of the Plan shall be subject to
approval by the shareholders of the Company within 12 months before or after
the date the Plan is adopted by the Board. If such shareholder approval is
obtained at a duly held shareholders' meeting, it may be obtained by the
affirmative vote of the holders of a majority of the shares of the Company
represented or present and entitled to vote thereon. All Options granted prior
to shareholder approval of the Plan are subject to such approval, and if such
approval is not obtained within 12 months before or after the date the Plan is
adopted by the Board all such Options shall expire and shall be of no further
force or effect.
18. TAXES, FEES, EXPENSES AND WITHHOLDING OF TAXES.
(a) The Company shall pay all original issue and transfer taxes (but not
income taxes, if any) with respect to the grant of Options and/or the issue and
transfer of
10
11
Shares pursuant to the exercise thereof, and all other fees and expenses
necessarily incurred by the Company in connection therewith, and will from time
to time use its best efforts to comply with all laws and regulations which, in
the opinion of counsel for the Company, shall be applicable thereto.
(b) The grant of Options hereunder and the issuance of Shares pursuant to
the exercise thereof is conditioned upon the Company's reservation of the right
to withhold, in accordance with any applicable law, from any compensation or
other amounts payable to the Optionee, any taxes required to be withheld under
federal, state or local law as a result of the grant or exercise of such Option
or the sale of the Shares issued upon exercise thereof. To the extent that
compensation or other amounts, if any, payable to the Optionee are insufficient
to pay any taxes required to be so withheld, the Company may, in its sole
discretion, require the Optionee, as a condition of the exercise of an Option,
to pay in cash to the Company an amount sufficient to cover such tax liability
or otherwise to make adequate provision for the Company's satisfaction of its
withholding obligations under federal, state and local law.
19. LIABILITY OF COMPANY. The Company, its Parent or any Subsidiary which
is in existence or hereafter comes into existence shall not be liable to an
Optionee or other person if it is determined for any reason by the Internal
Revenue Service or any court having jurisdiction that any Options intended to
be Incentive Stock Options granted hereunder do not qualify as incentive stock
options within the meaning of Section 422 of the Code.
20. INFORMATION TO OPTIONEE. The Company shall provide without charge at
least annually to each Optionee during the period his or her Option is
outstanding a balance sheet and income statement of the Company. In the event
that the Company provides annual reports or periodic reports to its
shareholders during the period in which an Optionee's Option is outstanding,
the Company shall provide to each Optionee a copy of each such report.
21. INDEMNIFICATION. No member of the Committee or of the Board shall be
liable for any act or action taken, whether of commission or omission, except
in circumstances involving actual bad faith, or for any act or action taken,
whether of commission or omission, by any other member or by any officer,
agent, or Employee. In addition to such other rights of indemnification they
may have as members of the Board, or as members of the Committee, the Committee
shall be indemnified by the Company against reasonable expenses, including
attorneys' fees actually and necessarily incurred in connection with the
defense of any action, suit or proceeding, or in connection with any appeal
therein, to which they or any of them may be a party by reason of any action
taken, by commission or omission, in connection with the Plan or any Option
taken thereunder, and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel selected by
the Company) or paid by them in satisfaction of a judgment in any action, suit
or proceeding, except in relation to matters as to which it shall be adjudged
in such action, suit or proceeding that such Committee or Board member is
liable for actual bad faith in the performance of his or her duties; provided
that within 60 days after institution of any such action, suit or proceeding, a
Committee or Board member shall in writing offer the Company the opportunity,
at its own expense, to handle and defend the same.
22. NOTICES. Any notice to be given to the Company pursuant to the
provisions of this Plan shall be given in writing, addressed to the Company in
care of its Secretary at its principal office, and any notice to be given to an
employee to whom an Option is granted
11
12
hereunder shall be delivered personally or addressed to him or her at the
address given beneath his or her signature on his Option Agreement or Stock
Purchase Agreement or at such other address as such Optionee or his or her
transferee (upon the transfer of the Optioned Stock) may hereafter designate in
writing to the Company. Any such notice shall be deemed duly given when
enclosed in a properly sealed envelope or wrapper addressed as aforesaid,
registered or certified, and deposited, postage and registry or certification
fee prepaid, in a post office or branch post office regularly maintained by the
United States Postal Service. It shall be the obligation of each Optionee and
each transferee holding Shares purchased upon exercise of an Option to provide
the Secretary of the Company, by letter mailed as provided hereinabove, with
written notice of his or her direct mailing address.
23. NO ENLARGEMENT OF EMPLOYEE RIGHTS. This Plan is purely voluntary on
the part of the Company, and the continuance of the Plan shall not be deemed to
constitute a contract between the Company and any Employee, or to be
consideration for or a condition of the employment or service of any Employee.
Nothing contained in this Plan shall be deemed to give any Employee the right
to be retained in the employ or service of the Company, its Parent, Subsidiary
or a successor corporation, or to interfere with the right of the Company or
any such corporations to discharge or to retire any Employee at any time with
or without cause and with or without notice. No Employee shall have any right
to or interest in Options authorized hereunder prior to the grant thereof to
such Employee, and upon such grant he or she shall have only such rights and
interests as are expressly provided herein, subject, however, to all applicable
provisions of the Company's Articles of Incorporation, as the same may be
amended from time to time.
24. LEGENDS ON CERTIFICATES.
(a) FEDERAL LAW. Unless an appropriate registration statement is filed
pursuant to the Federal Securities Act of 1933, as amended, with respect to the
Options and Shares issuable under this Plan, each document or certificate
representing such Options or Shares shall be endorsed thereon with a legend
substantially as follows:
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND HAVE BEEN ACQUIRED
FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE,
TRANSFER OR DISTRIBUTION THEREOF. NO SUCH SALE, TRANSFER OR DISTRIBUTION MAY
BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN
OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
REQUIRED."
(b) ADDITIONAL LEGENDS. Each document or certificate representing the
Options or Shares issuable under the Plan shall also contain legends as may be
required under applicable blue sky laws or by any Stock Purchase Agreement or
other agreement the execution of which is a condition to the exercise of an
Option under this Plan.
25. AVAILABILITY OF PLAN. A copy of this Plan shall be delivered to the
Secretary of the Company and shall be shown by him or her to any eligible
person making reasonable inquiry concerning it.
12
13
26. INVALID PROVISIONS. In the event that any provision of this Plan is
found to be invalid or otherwise unenforceable under any applicable law, such
invalidity or unenforceability shall not be construed as rendering any other
provisions contained herein as invalid or unenforceable, and all such other
provisions shall be given full force and effect to the same extent as though
the invalid or unenforceable provision was not contained herein.
27. SEVERABILITY. In the event that any provision of the Plan is found to
be invalid or otherwise unenforceable under any applicable law, such invalidity
or unenforceability shall not be construed as rendering any other provisions
contained herein as invalid or unenforceable, and all such other provisions
shall be given full force and effect to the same extent as though the invalid
or unenforceable provision was not contained herein.
28. APPLICABLE LAW. To the extent that federal laws do not otherwise
control, this Plan shall be governed by and construed in accordance with the
laws of the State of Nevada without regard to the conflict of laws principles
thereof.
(END OF PLAN)
13
14
EXHIBIT A-1
FUNDEX GAMES, LTD.
INCENTIVE STOCK OPTION AGREEMENT
Fundex Games, Ltd., a Nevada corporation (the "COMPANY"), hereby grants to
_________________________ (the "OPTIONEE") an option to purchase a total of
_____ shares of Common Stock (the "SHARES") of the Company, at the price set
forth herein, and in all respects subject to the terms and provisions of the
Company's 1996 Stock Option Plan (the "PLAN") applicable to incentive stock
options which terms and provisions are hereby incorporated by reference herein.
Unless otherwise defined or the context herein otherwise requires, the
capitalized terms used herein shall have the same meanings ascribed to them in
the Plan.
1 NATURE OF THE OPTION. This Option is intended to be an incentive stock
option within the meaning of Section 422 of the Internal Revenue Code of 1986,
as amended (the "CODE").
2. DATE OF GRANT; TERM OF OPTION. This Option is granted as of
___________________, and it may not be exercised later than
_______________________.
3. OPTION EXERCISE PRICE. The Option exercise price is $_________ per
Share, which price is not less than the fair market value thereof on the date
this Option was granted.
4. EXERCISE OF OPTION. This Option shall be exercisable during its term
only in accordance with the terms and provisions of the Plan and this Option as
follows:
(a) RIGHT TO EXERCISE. This Option shall vest and be exercisable,
cumulatively (Specify vesting schedule, e.g., in five annual installments
commencing on the first anniversary of the date of grant and continuing to vest
as to one additional installment on every annual anniversary thereafter as long
as the Optionee remains an Employee.)
(b) METHOD OF EXERCISE. This Option shall be exercisable by written notice
which shall state the election to exercise this Option, the number of Shares in
respect to which this Option is being exercised, such other representations and
agreements as to the Optionee's investment intent with respect to such Shares
as may be required by the Company hereunder or pursuant to the provisions of
the Plan. Such written notice shall be signed by the Optionee and shall be
delivered in person or by certified mail to the Secretary of the Company or
such other person as may be designated by the Company. The written notice shall
be accompanied by payment of the exercise price and by an executed Stock
Purchase Agreement if required by the Company. Payment of the exercise price
shall be by cash or by check or by such other method of payment as is
authorized by the Board in accordance with the Plan. The certificate or
certificates for the Shares as to which the Option shall be exercised shall be
registered in the name of the Optionee and shall be legended as set forth in
the Plan, the Stock Purchase Agreement and/or as required under applicable law.
This Option may not be exercised for a fraction of a share.
15
(c) RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of the Shares upon such exercise would constitute a violation of any
applicable federal or state securities laws or other laws or regulations. As a
condition to the exercise of this Option, the Company may require the Optionee
to make such representations and warranties to the Company as may be required
by any applicable law or regulation.
(d) NO SHAREHOLDER RIGHTS BEFORE EXERCISE AND ISSUANCE. No rights as a
shareholder shall exist with respect to the Shares subject to the Option as a
result of the grant of the Option. Such rights shall exist only after issuance
of a stock certificate in accordance with Section 8 (d) (i) of the Plan
following the exercise of the Option as provided in this Agreement and the
Plan.
5. INVESTMENT REPRESENTATIONS. In connection with the acquisition of this
Option, the Optionee represents and warrants as follows:
(a) The Optionee is acquiring this Option, and upon exercise of this
Option, he will be acquiring the Shares for investment for his own account, not
is a nominee or agent, and not with a view to, or for resale in connection
with, any distribution thereof.
(b) The Optionee has a preexisting business or personal relationship with
the Company or one of its directors, officers or controlling persons and by
reason of his business or financial experience, has, and could be reasonably
assumed to have, the capacity to evaluate the merits and risks of purchasing
Common Stock of the Company and to make an informed investment decision with
respect thereto and to protect Optionee's interests in connection with the
acquisition of this Option and the Shares.
6. TERMINATION OF STATUS AS AN EMPLOYEE.
(a) If the Optionee's Continuous Employment terminates for any reason
other than death or Disability, the Optionee shall have the right to exercise
the Option at any time within 30 days after the date of such termination to the
extent that the Optionee was entitled to exercise the Option at the date of
such termination (subject to any earlier termination of the Option as provided
by its terms).
(b) If the Optionee's Continuous Employment terminates due to the death or
Disability of the Optionee, the Option may be exercised at any time within 180
days after the date of such termination, in the case of death, by the
Optionee's estate or by a person who acquired the right to exercise the Option
by bequest or inheritance, or, in the case of Disability, by the Optionee
(subject to any earlier termination of the Option as provided by its terms).
(c) Notwithstanding the foregoing regarding the exercise of the Option
after the termination of Continuous Employment, the Option shall not be
exercisable after the expiration of its term, as set forth in Section 2 herein,
the Option may be exercised only to the extent the Optionee was entitled to
exercise it on the date Optionee's Continuous Employment with the Company
terminated. To the extent that the Optionee was not entitled to exercise the
Option at the date of termination, or to the extent the Option is not exercised
within the time specified herein, the Option shall terminate.
7. WITHHOLDING. The Company reserves the right to withhold, in accordance
with any applicable laws, from any compensation or other consideration payable
to the
2
16
Optionee, any taxes required to be withheld by federal, state or local law as a
result of the grant or exercise of this Option or the sale or other disposition
of the Shares issued upon exercise of this Option; and, if such compensation or
consideration is insufficient, the Company may require Optionee to pay to the
Company an amount sufficient to cover such withholding tax liability.
8. NONTRANSFERABILITY OF OPTION. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner,
either voluntarily or involuntarily by operation of law or otherwise, other
than by will or by the laws of descent or distribution or a transfer between
spouses incident to a "divorce" within the meaning of Section 1041(a) of the
Code, and may be exercised during the lifetime of the Optionee only by such
Optionee or his or her legal guardian. Subject to the foregoing and the terms
of the Plan, the terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
9. CONTINUATION OF EMPLOYMENT. Neither the Plan, this Option, nor any
Option granted thereunder shall (a) confer upon the Optionee any right
whatsoever to continue in the employment of the Company or any of its
subsidiaries or (b) limit or restrict in any respect the rights of the Company,
which rights are hereby expressly reserved, to terminate the Optionee's
employment and compensation at any time for any reason whatsoever, with or
without cause, in the Company's sole discretion and with or without notice.
10. THE PLAN. This Option is subject to, and the Company and the Optionee
agree to be bound by, all the terms and conditions of the Company's Plan as
such Plan may be amended from time to time in accordance with the terms
thereof, provided that no such amendment shall deprive the Optionee, without
his consent, of this Option or any rights hereunder. Pursuant to the Plan, the
Board is authorized to adopt rules and regulations not inconsistent with the
Plan as it shall deem appropriate and proper. A copy of the Plan in its present
form is available for inspection at the Company's principal office during
business hours by the Optionee or the persons entitled to exercise this Option.
11. ENTIRE AGREEMENT. The terms of this Agreement and the Plan constitute
the entire agreement between the Company and the Optionee with respect to the
subject matter hereof and supersede any and all previous agreements between the
Company and the Optionee.
FUNDEX GAMES, LTD., Inc., a Nevada
corporation
Date: ___________________________ By: ___________________________________
Title: ________________________________
The Optionee hereby acknowledges receipt of a copy of the Plan, a copy of which
is attached hereto, and represents that he has read and is familiar with the
terms and provisions thereof and of this Agreement, and hereby accepts this
Option subject to all of the terms and provisions thereof and of this
Agreement. Optionee hereby agrees to accept as binding, conclusive and final
all decisions or interpretations of the Board upon any questions arising under
the Plan.
3
17
Date:____________________________ _______________________________________
Signature of Optionee
_______________________________________
Address
_______________________________________
City State Zip Code
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXECUTION OF
THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE, TRANSFER OR
DISTRIBUTION THEREOF. NO SUCH SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION ARE SUBJECT
TO A RIGHT OF FIRST REFUSAL AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
TERMS OF A STOCK PURCHASE AGREEMENT TO BE ENTERED INTO BETWEEN THE HOLDER OF
THIS OPTION AND THE COMPANY UPON EXERCISE OF THIS OPTION, A COPY OF WHICH
AGREEMENT IS ON FILE WITH THE SECRETARY OF THE COMPANY.
4
18
EXHIBIT A-2
FUNDEX GAMES, LTD.
NONSTATUTORY STOCK OPTION AGREEMENT
FUNDEX GAMES, LTD., a Nevada corporation (the "COMPANY"), hereby grants to
_________________________ (the "OPTIONEE") an option to purchase a total of
______ shares of Common Stock (the "SHARES") of the Company, at the price set
forth herein, and in all respects subject to the terms and provisions of the
Company's 1996 Stock Option Plan (the "PLAN") applicable to nonstatutory stock
options which terms and provisions are hereby incorporated by reference herein.
Unless otherwise defined or the context herein otherwise requires, capitalized
terms used herein shall have the same meanings ascribed to them in the Plan.
1. NATURE OF THE OPTION. This Option is intended to be a nonstatutory
stock option and is NOT intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"CODE"), or to otherwise qualify for any special tax benefits to the Optionee.
2. DATE OF GRANT; TERM OF OPTION. This Option is granted as of
________________________, and it may not be exercised later than
____________________.
3. OPTION EXERCISE PRICE. The Option exercise price is $___________ per
Share, which price is not less than 85% of the fair market value thereof on the
date this Option was granted.
4. EXERCISE OF OPTION. This Option shall be exercisable during its term
only in accordance with the terms and provisions of the Plan and this Option as
follows:
(a) RIGHT TO EXERCISE. This Option shall vest and be exercisable,
cumulatively (Specify vesting schedule, e.g., in five annual installments
commencing on the first anniversary of the date of grant and continuing
to vest as to one additional installment on every annual anniversary
thereafter as long as the Optionee remains an Employee.)
(b) METHOD OF EXERCISE. This Option shall be exercisable by written
notice which shall state the election to exercise this Option, the number
of Shares in respect to which this Option is being exercised, such other
representations and agreements as to the Optionee's investment intent
with respect to such Shares as may be required by the Company hereunder
or pursuant to the provisions of the Plan. Such written notice shall be
signed by the Optionee and shall be delivered in person or by certified
mail to the Secretary of the Company or such other person as may be
designated by the Company. The written notice shall be accompanied by
payment of the exercise price and by an executed Stock Purchase Agreement
if required by the Company. Payment of the exercise price shall be by
cash or by check or by such other method of payment as is authorized by
the Board in accordance with the Plan. The certificate or certificates
for the Shares as to which the Option shall be exercised shall be
registered in the name of the
19
Optionee and shall be legended as set forth in the Plan, the Stock
Purchase Agreement and/or as required under applicable law. This Option
may not be exercised for a fraction of a Share.
(c) RESTRICTIONS ON EXERCISE. This Option may not be exercised if
the issuance of the Shares upon such exercise would constitute a
violation of any applicable federal or state securities laws or other
laws or regulations. As a condition to the exercise of this Option, the
Company may require the Optionee to make such representations and
warranties to the Company as may be required by any applicable law or
regulation.
(d) NO SHAREHOLDER RIGHTS BEFORE EXERCISE AND ISSUANCE. No rights as
a shareholder shall exist with respect to the Shares subject to the
Option as a result of the grant of the Option. Such rights shall exist
only after issuance of a stock certificate in accordance with Section 8
(d) (i) of the Plan following the exercise of the Option as provided in
this Agreement and the Plan.
5. INVESTMENT REPRESENTATIONS. In connection with the acquisition of this
Option, the Optionee represents and warrants as follows:
(a) The Optionee is acquiring this Option, and upon exercise of this
Option, he will be acquiring the Shares for investment for his own
account, not as a nominee or agent, and not with a view to, or for resale
in connection with, any distribution thereof.
(b) The Optionee has a preexisting business or personal relationship
with the Company or one of its directors, officers or controlling persons
and by reason of his business or financial experience, has, and could be
reasonably assumed to have, the capacity to evaluate the merits and risks
of purchasing Common stock of the Company and to make an informed
investment decision with respect thereto and to protect Optionee's
interests in connection with the acquisition of this Option and the
Shares.
6. TERMINATION OF STATUS AS AN EMPLOYEE.
(b) If the Optionee's Continuous Employment terminates due to the
death or Disability of the Optionee, the Option may be exercised at any
time within 180 days after the date of such termination, in the case of
death, by the Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, or, in the case of
Disability, by the Optionee (subject to any earlier termination of the
Option as provided by its terms).
(c) Notwithstanding the foregoing regarding the exercise of the Option
after the termination of Continuous Employment, the Option shall not be
exercisable after the expiration of its term, as set forth in Section 2
herein, and the Option may be exercised only to the extent the Optionee
was entitled to exercise it on the date Optionee's Continuous Employment
with the Company terminated. To the extent that the Optionee was not
entitled to exercise the Option at the date of termination, or to the
extent the Option is not exercised within
2
20
the time specified herein, the Option shall terminate.
7. NONTRANSFERABILITY OF OPTION. This Option may not be sold, pledged,
assigned, hypothecated, gifted, transferred or disposed of in any manner,
either voluntarily or involuntarily by operation of law or otherwise, other
than by will or by the laws of descent or distribution or a transfer between
spouses incident to a "divorce" within the meaning of Section 1041(a) of the
Code, and may be exercised during the lifetime of the Optionee only by such
Optionee or his or her legal guardian. Subject to the foregoing and the terms
of the Plan, the terms of this Option shall be binding upon the executors,
administrators, heirs, successors and assigns of the Optionee.
8. CONTINUATION OF EMPLOYMENT. Neither this Option, the Plan nor any
Option granted thereunder shall (a) confer upon the Optionee any right
whatsoever to continue in the employment of the Company or any of its
Subsidiaries or (b) limit or restrict in any respect the rights of the Company,
which rights are hereby expressly reserved, to terminate the Optionee's
employment and compensation at any time for any reason whatsoever, with or
without cause, in the Company's sole discretion and with or without notice.
9. WITHHOLDING. The Company reserves the right to withhold, in accordance
with any applicable laws, from any consideration or other amounts payable to
the Optionee any taxes required to be withheld by federal, state or local law
as a result of the grant or exercise of this Option or the sale or other
disposition of the Shares issued upon exercise of this Option.
10. THE PLAN. This Option is subject to, and the Company and the Optionee
agree to be bound by, all of the terms and conditions of the Company's Plan as
such Plan may be amended from time to time in accordance with the terms
thereof, provided that no such amendment shall deprive the Optionee, without
his consent, of this Option or any rights hereunder. Pursuant to the Plan, the
Board is authorized to adopt rules and regulations not inconsistent with the
Plan as it shall deem appropriate and proper. A copy of the Plan in its present
form is available for inspection at the Company's principal office during
business hours by the Optionee or the persons entitled to exercise this Option.
11. ENTIRE AGREEMENT. The terms of this Agreement and the Plan constitute
the entire agreement between the Company and the Optionee with respect to the
subject matter hereof and supersede any and all previous agreements between the
Company and the Optionee.
FUNDEX GAMES, LTD., a Nevada corporation
Date: __________________________ By: _____________________________________
Title: __________________________________
The Optionee hereby acknowledges receipt of a copy of the Plan, a copy of
which is attached hereto, and represents that he has read and is familiar with
the terms and provisions thereof and of this Agreement, and hereby accepts this
Option subject to all of the terms and provisions thereof and of this
Agreement. The Optionee hereby agrees to accept as binding,
3
21
conclusive and final all decisions or interpretations of the Board upon any
questions arising under the Plan.
Date:__________________________ ________________________________________
Signature of Optionee
________________________________________
Address
________________________________________
City State Zip Code
4
22
THIS OPTION AND THE SECURITIES WHICH MAY BE PURCHASED UPON EXECUTION OF
THIS OPTION HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED, OR THE SECURITIES LAWS OF ANY STATE, AND HAVE BEEN ACQUIRED FOR
INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH THE SALE, TRANSFER OR
DISTRIBUTION THEREOF. NO SUCH SALE, TRANSFER OR DISTRIBUTION MAY BE EFFECTED
WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RFLATING THERETO OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
THE SHARES WHICH MAY BE PURCHASED UPON EXERCISE OF THIS OPTION ARE SUBJECT
TO A RIGHT OF FIRST REFUSAL AND MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE
TERMS OF A STOCK PURCHASE AGREEMENT TO BE ENTERED INTO BETWEEN THE HOLDER OF
THIS OPTION AND THE COMPANY UPON EXERCISE OF THIS OPTION, A COPY OF WHICH
AGREEMENT IS ON FILE WITH THE SECRETARY OF THE COMPANY.
5