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EXHIBIT 10.13
FUNDEX GAMES, LTD.
1996 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
1. PURPOSE. The purpose of this 1996 Stock Option Plan for Non-Employee
Directors ("PLAN") of FUNDEX GAMES, LTD., (the COMPANY"), a Nevada corporation,
is to encourage stock ownership by nonemployee directors ("DIRECTORS" or a
"DIRECTOR") by providing them a means to acquire a proprietary interest in the
Company, thereby advancing the interests of the Company by encouraging and
enabling the acquisition of its stock by Directors whose judgment and ability
are relied upon by the Company for the attainment of its long term growth and
development. Accordingly, the Plan is intended to promote a close identity of
interests among the Company, the Directors and its shareholders, as well as to
provide a means to attract and retain well-qualified Directors.
2. 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 of 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 remain in
effect for ten years from such date (___________, 1996), or until earlier
termination by the Board of Directors of the Company (the "BOARD"), whichever
occurs first.
3. STOCK SUBJECT TO THE PLAN. There are authorized for issuance or
delivery upon the exercise of options to be granted from time to time under the
Plan an aggregate of 50,000 shares of the Company's common stock, $.001 par
value ("COMMON STOCK"), subject to adjustment as provided hereinafter in
Section 8. Such shares may be, as a whole or in part, authorized but unissued
shares, whether now or hereafter authorized, or issued shares which have been
reacquired by the Company. If any option issued under this Plan shall expire,
terminate or be cancelled for any reason without having been exercised in full,
the shares of Common Stock which have not been purchased thereunder shall again
become available for the purposes of this Plan.
4. PLAN ADMINISTRATION:
(a) The Plan shall be administered by the Compensation Committee
(the "COMMITTEE"), which shall consist of at least two Directors
appointed by the Board.
(b) The Committee shall have full and final authority to interpret
the Plan, adopt, amend and rescind rules and regulations relating to the
Plan, and make all other determinations and take all other actions
necessary and advisable for the administration of the Plan.
(c) Decisions and determinations of the Committee on all matters
relating to the Plan shall be in its sole discretion and shall be
conclusive. No member of the Committee shall be liable for any action
taken or decision made in good faith relating to this Plan or any grant
hereunder.
(d) An administrator of the Plan (the "ADMINISTRATOR") may from time
to time be appointed by the Committee. If appointed, the Administrator
shall be responsible for the general administration of the Plan under the
policy guidance of the Committee. The Administrator shall be in the
employ of the Company, and shall be compensated for services and expenses
by the Company according to its normal employment policies
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without special or additional compensation, other than reimbursement of
expenses, if any, for his or her services as the Administrator.
5. TERMS AND CONDITIONS OF "FORMULA" STOCK OPTION AWARDS. Each Director
shall receive a non-qualified stock option in accordance with the terms and
conditions of this Section 5 and Section 6.
(a) INITIAL GRANTS UPON APPOINTMENT TO THE BOARD OF DIRECTORS. Each
person who is first elected or appointed to serve as a Director following
the effective date of this Plan shall be granted a non-qualified stock
option as of the first business day following the Director's election or
appointment to purchase 2,000 shares of Common Stock at an exercise price
equal to the then Fair Market Value (as defined in Section 5(d)) per
share of Common Stock.
(b) SUBSEQUENT GRANTS DURING TENURE AS A DIRECTOR. Each Director
shall be granted, as of the first business day of each fiscal year of the
Company beginning after the effective date of this Plan, a non-qualified
stock option to purchase 2,000 shares of Common Stock at an exercise
price equal to the then Fair Market Value (as defined in Section 5(d))
per share of Common Stock.
(c) CONDITIONS TO GRANTS. Options awarded pursuant to this Section 5
shall be subject to such additional terms as set forth in a non-qualified
stock option agreement as approved by the Committee and incorporated
herein by reference.
(d) FAIR MARKET VALUE. "Fair Market Value" with regard to any date
means the closing price at which a share of Common Stock shall have been
sold on that date as reported by the NASDAQ Stock Market (or, if
applicable, as reported by a national securities exchange selected by the
Committee on which the shares of Common Stock are then actively traded)
and published in The Wall Street Journal. If at the time of the
determination of Fair Market Value shares of Common Stock are not
actively traded on any market described above, Fair Market Value means
the fair market value of a share of Common Stock as determined by the
Committee taking into account such facts and circumstances deemed to be
material by the Committee to the value of the Common Stock in the hands
of the Director.
6. GENERAL TERMS AND CONDITIONS OF OPTIONS. Options awarded under
Section 5 shall be subject to the following additional terms and conditions.
(a) TERM AND EXERCISE OF OPTION. Options may be exercised only by
written notice to the Company. Payment for all shares of Common Stock
purchased pursuant to exercise of an option shall be made (i) in cash;
(ii) by delivery to the Company of a number of shares of Common Stock
which have been beneficially owned by the Director for at least six (6)
months prior to the date of exercise having an aggregate Fair Market
Value of not less than the product of the exercise price multiplied by
the number of shares the participant intends to purchase upon exercise of
the option on the date of delivery; or (iii) in a cashless exercise
through a broker. Payment shall be made at the time that the option or
any part thereof is exercised, and no shares shall be issued or delivered
upon exercise of an option until full payment has been made by the
participant. No option granted under the Plan may be exercised before the
expiration of the fiscal year for which it was granted; provided,
however, that any option granted under the Plan shall become immediately
exercisable upon the retirement of the Director because of age, death or
disability. No option granted under the Plan shall be exercisable after
the expiration of ten (10) years from the date upon which it is granted.
Each option shall be subject to termination before its date of expiration
as provided in Section 6(b).
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(b) DEATH OF DIRECTOR. Any option granted to a Director and
outstanding on the date of his or her death may be exercised by the
administrator of such Director's estate, the executor under his or her
will, or the person or persons to whom the option shall have been validly
transferred by such executor or administrator pursuant to the will or
laws of intestate succession, but not beyond the first to occur of (i)
the first anniversary of the Director's death, or (ii) the specified
expiration date of the option; provided, however, that an option that is
not exercised prior to the first anniversary of the Director's death
shall be deemed exercised on the first anniversary of the date of death
to the extent the then aggregate Fair Market Value of the shares subject
to the option exceeds the aggregate Option Exercise Price and payment of
such exercise price shall be effected by withholding a number of shares
of Common Stock otherwise issuable pursuant to the option the Fair Market
Value of which on such anniversary is equal to the exercise price. If the
Fair Market Value of the Stock on the first anniversary of the Director's
death equals or is less than the option exercise price, then the option
shall be deemed to have expired unexercised.
7. CHANGES IN CAPITALIZATION. If the outstanding shares of Common Stock
are increased, decreased or exchanged for a different number or kind of shares
or other securities, or if additional shares of other property (other than
ordinary cash dividends) are distributed with respect to such shares of Common
Stock or other securities, through merger, consolidation, sale of all or
substantially all of the assets of the Company, reorganization,
recapitalization, reclassification, dividend, stock split, reverse stock split,
spin-off, split-off or other distribution with respect to such shares of Common
Stock, or other securities, an appropriate and proportionate adjustment shall
be made in (i) the maximum number and kind of shares reserved for issuance
under the Plan, (ii) the number and kind of shares or other securities subject
to then outstanding options under the Plan, and (iii) the price for each share
subject to any then outstanding options under the Plan. No fractional shares
will be issued under the Plan on account of any such adjustments. Any
adjustment pursuant to this Section 7 shall provide for the elimination without
payment therefor of any fractional shares. No such adjustment shall be made
with respect to the Company's reincorporation as a Nevada corporation in
connection with its initial public offering.
8. LIMITATION OF RIGHTS:
(a) NO RIGHT TO CONTINUE AS A DIRECTOR. Neither the Plan, nor the
granting of an option, nor any other action taken pursuant to the Plan,
shall constitute evidence of any agreement or understanding, express or
implied, that the Company will retain a Director as a director for any
period of time, or at any particular rate of compensation.
(b) NO SHAREHOLDERS RIGHTS FOR OPTIONS. The holder of an option
granted under the Plan shall have no rights as a shareholder with respect
to the shares covered by his or her options until the date of the
issuance to such holder of a stock certificate therefor, and no
adjustment will be made for dividends or other rights for which the
record date is prior to the date such certificate is issued.
(c) NO RIGHT TO PARTICIPATE AS AN EMPLOYEE DIRECTOR. A Director's
right to participate in the Plan shall automatically terminate if and
when a Director becomes an employee of the Company.
9. TRANSFERABILITY:
(a) Options are not transferable other than by will or the laws of
intestate succession. No transfer by will or by the laws of intestate
succession shall be effective to bind the Company unless the Committee
shall have been furnished with a copy of the
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deceased participant's will or such other evidence as the Committee may
deem necessary to establish the validity of the transfer.
(b) Only a Director, or in the event of disability, his or her
guardian, or in the event of death, his or her legal representative or
beneficiary, may exercise options and receive deliveries of shares.
(c) A Director or his transferee upon his death may not transfer any
Option or any of the Common Stock acquired pursuant to the exercise of an
Option until six months from the date of grant of the Option.
10. AMENDMENT, MODIFICATION AND TERMINATION. The Board at any time may
terminate and in any respect amend or modify the Plan; provided, however, that
no such action by the Board, without approval of the Company's shareholders,
may (i) increase the total number of shares of Common Stock available under the
Plan in the aggregate (except as otherwise provided in Section 7 above), (ii)
extend the period during which any option may be exercised, (iii) extend the
term of the Plan, (iv) change any option exercise price or (v) alter the class
of persons eligible to receive options. No amendment, modification or
termination of the Plan shall in any manner adversely affect the rights of any
Director with respect to an option previously granted. Notwithstanding any
other provision of this Plan, the provisions of Section 5 may not be amended
more than once every six months, other than to conform it with changes in the
Internal Revenue Code of 1986, as amended, the Employee Retirement Income
Security Act of 1974, or any rules under either of the foregoing.
11. NOTICE. Any written notice to the Company required by any of the
provisions of the Plan shall be addressed to the Corporate Secretary of the
Company and shall become effective when it is received.
12. RESTRICTIONS ON DELIVERY AND SALE OF SHARES; LEGENDS. Each option is
subject to the condition that if at any time the Committee, in its discretion,
shall determine that the listing, registration or qualification of the shares
covered by such option upon any securities exchange or under any state or
federal law is necessary or desirable as a condition of or in connection with
the granting of such option or the purchase or delivery of shares thereunder,
the delivery of any or all shares pursuant to such option may be withheld
unless and until such listing, registration or qualification shall have been
effected. If a registration statement is not in effect under the Securities Act
of 1933 or any applicable state securities laws with respect to the shares of
Common Stock purchasable or otherwise deliverable under options then
outstanding, the Committee may require, as a condition of exercise of any
option or as a condition to any other delivery of Common Stock pursuant to an
option, that the Director represent, in writing, that the shares received
pursuant to the option are being acquired for investment and not with a view to
distribution and agree that the shares will not be disposed of except pursuant
to an effective registration statement, unless the Company shall have received
an opinion of counsel that such disposition is exempt from such requirement
under the Securities Act of 1933 and any applicable state securities laws. The
Company may include on certificates representing shares issued pursuant to an
option such legends referring to the foregoing representations or restrictions
or any other applicable restrictions on resale as the Company, in its
discretion, shall deem appropriate.