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EXHIBIT 4.3
DIGITAL ARCHAEOLOGY CORPORATION
1996 STOCK OPTION PLAN
Section 1. PURPOSES OF THE PLAN. The purposes of this Stock Option Plan
(the "Plan") are to attract and retain the best available personnel for
positions of substantial responsibility, to provide additional incentive to the
Employees and Consultants of the Company and to promote the success of the
Company's business.
Options granted hereunder may be either Incentive Stock Options or
Nonqualified Stock Options, at the discretion of the Board and as reflected in
the terms of the Option Agreement.
Section 2. DEFINITIONS. As used herein, unless the context otherwise
requires, the following definitions shall apply:
(a) "BOARD" shall mean the Committee, if one has been appointed,
or the Board of Directors of the Company, if no Committee is appointed.
(b) "CHANGE OF CONTROL EVENT" shall mean the following:
(i) any person or entity becomes the beneficial owner (as
defined in the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) directly or indirectly, of securities of the Company representing
more than 50% of the combined voting power of the Company's then
outstanding securities; or
(ii) the shareholders of the Corporation approve a merger or
consolidation of the Company with any other company, other than (A) a
merger which would result in the voting securities of the Company
outstanding immediately prior thereto, continuing to represent in
combination with the .ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, at least 60% of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation
or (B) a merger or consolidation effected to implement a recapitalization
of the Company in which no person or entity acquires more than 50% of the
combined voting power of the Company's then outstanding shares; or
(iii) the shareholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all, or substantially all of the Company's
assets.
(c) "CODE" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "COMMON STOCK" shall mean the Common Stock of the Company.
(e) "COMPANY" shall mean Digital Archaeology Corporation, a
Kansas 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) "CONSULTANT" shall mean any person who is engaged by the
Company or any subsidiary to render consulting services and is compensated for
such consulting services or any other person determined by the Board to have
performed services for or on behalf of the Company which merits the grant of an
Option, and any director of the Company whether compensated for such services or
not; provided that if and in the event the Company registers any class of any
equity security pursuant to
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Section 12 of the Exchange Act, the term Consultant shall thereafter not include
directors who are not compensated for their services or are paid only a
director's fee by the Company.
(h) "CONTINUOUS STATUS AS AN EMPLOYEE OR CONSULTANT" shall mean
the absence of any interruption or termination of service as an Employee or
Consultant. Continuous Status as an Employee or Consultant shall not be
considered interrupted in the case of sick leave, military leave, maternity
leave, or any other leave of absence approved by the Board; provided that such
leave is for a period of not more than ninety (90) days or reemployment upon the
expiration of such leave is guaranteed by contract or statute.
(i) "EMPLOYEE" shall mean any person, including officers and
directors, employed by the Company or any Parent or Subsidiary of the Company.
The payment of a director's fee by the Company shall not be sufficient to
constitute "employment" by the Company.
(j) "FAIR MARKET VALUE" of a Share shall be determined by the
Board in its discretion; provided, however, that if there is a public market for
the Common Stock, the fair market value per Share shall be the mean of the bid
and asked prices (or the closing price per Share if the Common Stock is listed
on the NASDAQ National Market) of the Common Stock on the date of determination,
as reported in THE WALL STREET JOURNAL (or, if not so reported, as otherwise
reported by NASDAQ) or, in the event the Common Stock is listed on a stock
exchange, the fair market value per Share shall be the closing price on such
exchange on the date of determination, as reported in THE WALL STREET JOURNAL.
(k) "INCENTIVE STOCK OPTION" shall mean any Option granted
hereunder and intended to qualify as an incentive stock option within the
meaning of Section 422A of the Code.
(1) "NONQUALIFIED STOCK OPTION" shall mean any Option granted
hereunder and not intended to qualify as an Incentive Stock Option.
(m) "OPTION" shall mean stock options granted pursuant to the
Plan whether designed as Incentive Stock Options or Nonqualified Stock Options.
(n) "OPTIONED STOCK" shall meant the Common Stock subject to an
Option.
(o) "OPTION AGREEMENT" shall mean the agreement between the
Company and the Optionee as described in SECTION 5 of the Plan.
(p) "OPTIONEE" shall mean an Employee or Consultant who receives
an Option.
(q) "PARENT" shall mean a "parent corporation", whether now or
hereafter existing, as defined in Section 425(e) of the Code.
(r) "PLAN" shall mean this 1996 Stock Option Plan.
(s) "SHARE" shall mean a share of the Common Stock, as adjusted
in accordance with SECTION 12 of the Plan.
(t) "SUBSIDIARY" shall mean a "subsidiary corporation," whether
now or hereafter existing, as defined in Section 425(f) of the Code.
Section 3. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
SECTION 14 of the Plan, the maximum aggregate number of shares which may be
optioned and sold under the Plan is 500,000 shares of Common Stock. The Shares
may be authorized, but unissued, or reacquired Common Stock.
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If an Option should expire or become unexercisable for any reason without
having been exercised in full, the unpurchased Shares that were subject thereto
shall, unless the Plan shall have been terminated, become available for future
grant under the Plan. Notwithstanding any other provision of the Plan, Shares
issued under the Plan and later repurchased by the Company shall become
available for future grant or sale under the Plan.
Section 4. ADMINISTRATION OF THE PLAN.
(a) PROCEDURE. The Plan shall be administered by the Board.
(i) Subject to subparagraph (ii), the Board may appoint a
Committee consisting of not less than two members of the Board to
administer the Plan on behalf of the Board, subject to such terms and
conditions as the Board may prescribe. Once appointed, the Committee shall
continue to serve until otherwise directed by the Board. Members of the
Board who are either 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, but any such member may be
counted in determining the existence of a quorum at any meeting of the
Board during which action is taken with respect to the granting of Options
to him.
(ii) Notwithstanding the foregoing subparagraph (i), if in
any event the Company registers any class of any. equity security pursuant
to Section 12 of the Exchange Act, from the effective date of such
registration (the "Effective Date") until six (6) months after the
termination of such registration (the "Termination Date"), any grants of
Options to officers or directors shall be made only by a Committee
consisting of two or more directors appointed by the Board and having full
authority to act in the matter, none of whom is eligible to participate in
the Plan or any other stock option or other stock plan of the Company or
any of its affiliates (as such term is defined in Rule 12b2 under the
Exchange Act), or has been eligible at any time within the preceding year,
except as may be permitted under Rule 16b-3 under the Exchange Act. Any
Committee administering the Plan with respect to grants to officers who are
not also directors shall conform to the requirements of the preceding
sentence. Once appointed, the Committee shall continue to serve until
otherwise directed by the Board.
(iii) The Committee may select one of its members as its
Chairman.
(iv) The Committee shall hold its meetings at such times and
places as it shall deem advisable. All determinations of the Committee
shall be made by a unanimous vote of its members; provided, however, that
any decision or determination reduced to writing and signed by all of the
members of the Committee shall be fully effective as if its had been made
by the unanimous vote of all of its members at a meeting duly called and
held. The Committee may appoint a Secretary, shall make rules and
regulations for the conduct of its business as it shall deem advisable, and
may, but shall not be required to, keep minutes of the meeting.
(v) Subject to the foregoing subparagraphs (i), (ii), (iii)
and (iv), from time to time the Board may increase the size of the
Committee and appoint additional members thereof, 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.
(b) POWERS OF THE BOARD. Subject to the provisions of the Plan,
the Board shall have the authority, in its discretion: (i) to grant Inventive
Stock Options or Nonqualified Stock Options; (ii) to determine upon review of
relevant information the Fair Market Value of the Common Stock; (iii) to
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determine the exercise price per shall of Options to be granted, which exercise
price shall be determined in accordance with SECTION 9(a) of the Plan; (iv) to
determine the Employees or Consultants to whom, and the time or times at which,
Options shall be granted and the number of shares to be represented by each
Option; (v) to interpret the Plan; (vi) to prescribe, amend and rescind rules
and regulations relating to the Plan; (vii) to determine the terms and
provisions of each Option granted (which need not be identical) and, with the
consent of the holder thereof, modify or amend each Option; (viii) to accelerate
or defer (with the consent of the Optionee) the exercise date of any Option,
consistent with the provisions of SECTION 6 of the Plan; (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; and (x) to make all
other determinations deemed necessary or advisable for the administration of the
Plan.
(c) EFFECT OF BOARD'S DECISION. All decisions, determinations
and interpretations of the Board shall be final and binding on all Optionees and
any other holders of any Options granted under the Plan.
Section 5. OPTION AGREEMENT. An Option Agreement signed by the Chairman
of the Board, the President, or a Vice President of the Company and attested by
the Treasurer, Assistant Treasurer, Secretary, or Assistant Secretary of the
Company, shall be issued to each person to whom an Option is granted. The form
and provisions of each Option Agreement shall be determined by the Board, or the
Committee, if appointed, in accordance with the terms of the Plan.
Section 6. ELIGIBILITY.
(a) Options may be granted only to Employees and Consultants.
Incentive Stock Options may be granted only to Employees. An Employee or
Consultant who has been granted an Option may, if he is otherwise eligible, be
granted additional Options.
(b) To the extent that the aggregate fair market value of Common
Stock with respect to which Incentive Stock Options are exercisable for the
first time by any Optionee during any calendar year (under all plans of the
Company or any Parent or Subsidiary) exceeds $100,000, the amount in excess of
$100,000 shall be treated as Nonqualified Stock Options.
(c) SECTION 6(b) of the Plan shall apply only to an Incentive
Stock Option evidenced by an Option Agreement which sets forth the intention of
the Company and the Optionee that such Option shall qualify as an Incentive
Stock Option. SECTION 6(b) of the Plan shall not apply to any Nonqualified
Option.
(d) The Plan shall not confer upon any Optionee any right with
respect to continuation of employment or consulting relationship with the
Company, nor shall it interfere in any way with his right or the Company's right
to terminate his employment or consulting relationship at any time.
Section 7. TERM OF PLAN. The Plan shall become effective upon the
earlier to occur of its adoption by the Board or its approval by the shareholder
of the Company as described in SECTION 19 of the Plan. It shall continue in
effect for a term of ten (10) years unless sooner terminated under SECTION 16 of
the Plan; provided, however, that the termination of the Plan shall not affect
any Options granted prior to such termination.
Section 8. TERM OF OPTION. The term of each Incentive Stock Option
shall be 10 years from the date of grant thereof or such shorter term as may be
provided in the Option Agreement. The terms of each Option that is not an
Incentive Stock Option shall be determined by the Board and set forth in the
Option Agreement. However, in the case of an Incentive Stock Option granted to
an Optionee who, at the
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time the Incentive Stock Option is granted, owns stock representing more than
10% of the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the term of the Incentive Stock Option shall be five years from the
date of grant thereof or such shorter time as may be provided in the Incentive
Stock Option Agreement.
Section 9. EXERCISE PRICE AND CONSIDERATION.
(a) EXERCISE PRICE. The per share price for the Shares to be
issued pursuant to exercise of an Option shall be such price as is determined by
the Board, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(A) granted to an Employee who, at the time of the
grant of such Incentive Stock Option, owns stock representing more
than 10% of the voting power of all classes of stock of the Company or
any Parent or Subsidiary, the per Share exercise price shall be no
less than 110% of the Fair Market Value per Share on the date of
grant.
(B) granted to any other Employee, the per Share
exercise price shall be no less than 100% of the Fair Market Value per
Share on the date of grant.
(ii) In the case of an Option granted on or after the
Effective Date and prior to six (6) months after the Termination Date, the
per Share exercise price shall be no less than 100% of the Fair Market
Value per Share on the date of grant.
(iii) In the case of Nonqualified Stock Options, at any
price per share determined by the Board.
(b) FORM 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 and may consist entirely of cash, check, other
Shares of Common Stock having a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which such Option shall be
exercised, or any combination of such methods of payment, or such other
consideration and method of payment for the issuance of Shares to the extent
permitted under K.S.A. Sections 176402, 176403 and 176407 of the Kansas General
Corporation Code. In making its determination as to the type of consideration to
accept, the Board shall consider if acceptance of such consideration may be
reasonably expected to benefit the Company.
Section 10. EXERCISE OF OPTION.
(a) PROCEDURE FOR EXERCISE. Any Option granted hereunder shall
be exercisable in whole or in part as set forth in the Plan and the Option
Agreement; provided, however, that no Option shall be exercisable for less than
one hundred (100) shares at any one time, unless the balance of the shares
subject to the Option at such time is less than one hundred (100) shares, in
which case the entire unexercisable portion of the Option shall be exercised at
one time. The Board, or the Committee, if one is appointed, may, in its sole
direction, set forth in any Option Agreement certain criteria for vesting,
including performance criteria with respect to the Company and/or the Optionee,
and as shall be permissible under the terms of the Plan. An Option may not be
exercised for a fraction of a Share.
(b) MANNER OF EXERCISE. An Option shall be deemed to be
exercised when written notice of such exercise in the form required by the
Nonqualified or Incentive Stock Option Agreement has been given to the Company
in accordance with the terms of the Option by the person entitled to
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exercise the Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company. Full payment may, as
authorized by the Board, consist of any consideration and method of payment
allowable under SECTION 9(b) of the Plan.
(c) STOCKHOLDER RIGHTS OF OPTIONEE. Until the issuance (as
evidenced by the appropriate entry on the books of the Company or of a duly
authorized transfer agent of the Company) of the stock certificate evidencing
such Shares, no right to vote or receive dividends or any other rights as a
shareholder shall exist with respect to the Optioned Stock, notwithstanding the
exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly upon exercise of the Option. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in SECTION 14 of the
Plan.
(d) EFFECT OF EXERCISE. 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 purchase under the Option, by
the number of Shares as to which the Option is exercised.
Section 11. EMPLOYMENT CONDITIONS. Options granted pursuant to this Plan
shall be exercisable only while the Optionee is an Employee or Consultant of the
Company, any Parent, or any Subsidiary, and, to the extent otherwise exercisable
on the date of termination of employment, as follows:
(a) TERMINATION OF STATUS AS AN EMPLOYEE OR CONSULTANT. In the
event of termination of an Optionee's Continuous Status as an Employee or
Consultant for any reason other than disability (as defined in Section 22(e)(3)
of the Code) or death, for a period of ninety (90) days following such
termination, but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement, the Optionee may exercise his
Option to the extent that he was entitled to exercise it at the date of such
termination. To the extent that he was not entitled to exercise the Option at
the date of such termination, or if he does not exercise such Option which he
was entitled to exercise within the time specified herein, the Option shall
terminate.
(b) DISABILITY OF OPTIONEE. In the event of termination of an
Optionee's Continuous Status as an Employee or Consultant as a result of his
total and permanent disability (as defined in Section 22(e)(3) of the Code), he
may, but only within twelve (12) months from the date of termination, but in no
event later than the date of expiration of the term of such Option as set forth
in the Option Agreement, exercise his Option to the extent he was entitled to
exercise the Option at the date of termination, or if he does not exercise such
Option (which he was entitled to exercise) within the time specified herein, the
Option shall terminate.
(c) DEATH OF OPTIONEE. With respect to Options, in the event of
the death of an Optionee:
(i) who is at the time of his death an Employee or
Consultant of the Company and who shall have been in Continuous Status as
an Employee or Consultant since the date of grant of the Option, the Option
may be exercised, at any time within twelve (12) months following the date
of death (but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement), by the Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that would
have accrued had the Optionee continued living and remained in Continuous
Status as an Employee or Consultant twelve (12) months after the date of
death, subject to the limitation set forth in SECTION 6(b); or
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(ii) which occurs within ninety (90) days after the
termination of Continuous Status as an Employee or Consultant, the Option
may be exercised at any time within twelve (12) months following the date
of death but in no event later than the date of expiration of the term of
such Option as set forth in the Option Agreement, by the Optionee's estate
or by a person who acquired the right to exercise the Option by bequest or
inheritance, but only to the extent of the right to exercise that had
accrued at the date of termination.
Section 12. NON-TRANSFERABILITY OF OPTIONS. Options may not be sold,
pledged, assigned, hypothecated, transferred, or disposed of in any manner other
than by will or by the laws of decent or distribution and may be exercised,
during the lifetime of the Optionee, only by the Optionee.
Section 13. NOT AN EMPLOYMENT CONTRACT. Nothing in the Plan or in any
Option Agreement pertaining to an Option shall confer on an individual any right
to continue in the employ of the Company, a Parent, or a Subsidiary or, subject
to the provisions of any written employment agreement between such individual
the Company, a Parent or a Subsidiary at any time to terminate or modify the
terms or conditions of the employment of the Optionee.
Section 14. CHANGES IN CAPITALIZATION.
(a) STOCK SPLITS, REVERSE SPLITS, RECLASSIFICATION. Subject to
any required action by the shareholders of the Company, the number of shares of
Common Stock covered by each outstanding Option, and the number of shares of
Common Stock which have been authorized for issuance under the Plan upon
cancellation or expiration of an Option, as well as the price per Share of
Common Stock covered by each such outstanding Option, shall be proportionately
adjusted for any increase or decrease in the number of issued shares of Common
Stock resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of 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; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been "effected
without 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 issuance 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 of Common Stock subject to an Option.
(b) DISSOLUTION AND LIQUIDATION. In the event of the proposed
dissolution or liquidation of the Company, the Option will terminate immediately
prior to the consummation of such proposed action, unless otherwise provided by
the Board. The Board may, in the exercise of its sole discretion in such
instances, declare that any Option shall terminate as of a date fixed by the
Board and give each Optionee the right to exercise his Option as to all or any
part of the Optioned Stock, including Shares as to which the Option would not
otherwise be exercisable.
(c) SALES OF ASSETS. In the event of a proposed sale of all or
substantially all of the assets of the Company, or the merger of the Company
with or into another corporation, the Option shall be assumed or an equivalent
option shall be substituted by such successor corporation or a parent or
subsidiary of such successor corporation. Unless the option agreement granting
an Option to an Optionee specifically provides otherwise, in the event that such
successor corporation refuses to assume the Option or to substitute an
equivalent option, the Board shall, in lieu of such assumption or substitution,
provide for the Optionee to have the right to exercise the Option as to all of
the Optioned Stock, including Shares as to which the Option would not otherwise
be exercisable.
(d) CHANGE OF CONTROL EVENT. Upon a Change of Control Event,
Options granted under the Plan may, in the discretion of the Board or the
Committee if one is appointed, (i) be
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immediately vested, fully earned, and
exercisable, as appropriate, and (ii) the Company shall permit the exercise of
such Options.
(e) NOTICE. The Board shall give written notice to each holder
of an Option of the pendency of the sale of all or substantially all of the
assets of the Company, a merger involving the Company or the dissolution or
liquidation of the Company not less than ten (10) days prior to such
transaction. If the Board makes an Option fully exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the Board
shall notify the Optionee that the Option shall be fully exercisable for a
period of thirty (30) days from the date of such notice, and the Option will
terminate upon the expiration of such period.
Section 15. 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. Notice of the determination shall be given to each
Employee or Consultant to whom an Option is so granted within a reasonable time
after the date of such grant.
Section 16. 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;
provided that, the following revisions or amendments shall require approval of
the shareholders of the Company in the manner described in SECTION 19 of the
Plan:
(i) any increase in the number of Shares subject to the
Plan, other than in connection with an adjustment under SECTION 14 of the
Plan;
(ii) any change in the designation of the class of persons
eligible to be granted Options; or
(iii) if the Company has a class of equity securities
registered under Section 12 of the Exchange Act at the time of such
revision or amendment, any material increase in the benefit accruing to
participants under the Plan.
(b) SHAREHOLDER APPROVAL. If any amendment requiring shareholder
approval under SECTION 16(a) of the Plan is made subsequent to the first
registration of any class of equity securities by the Company under Section 12
of the Exchange Act, such shareholder approval shall be solicited as described
in SECTION 19 of the Plan.
(c) EFFECT OF AMENDMENT OR TERMINATION. Any such 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 Board, which agreement must be in writing and signed by the Optionee and the
Company.
Section 17. CONDITIONS UPON ISSUANCE OF SHARES. Shares shall not be
issued pursuant to the exercise of any 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 Exchange Act, the. rules and regulations
promulgated thereunder, and the requirements of any sock 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.
As a condition to the exercise of an Option, the Company may require the
person exercising such Option to represent and warrant at the time of any such
exercise that the Shares are being purchase only
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for investment and without any present intention to sell or distribute such
Shares if, in the opinion of the counsel for the Company, such a representation
is required by any of the aforementioned relevant provisions of law.
Section 18. RESERVATION OF SHARES. The Company, during the term of this
Plan, will at all times reserve and keep available such number of Shares as
shall be sufficient to satisfy the requirements of the Plan.
The inability of the Company to obtain authority from any regulatory body
having jurisdiction, which authority is deemed by the Company's counsel to be
necessary to the lawful issuance and sale of any Shares hereunder, shall relieve
the Company of any liability in respect of the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
Section 19. SHAREHOLDER APPROVAL.
(a) Continuance of the Plan shall be subject to approval by the
shareholders of the Company within twelve (12) months before or after the date
the Plan is adopted. If such shareholder approval is obtained at a duly held
shareholders' meeting, is must be obtained by the affirmative vote of the
holders of a majority of the outstanding shares of the Company, or if such
shareholder approval is obtained by written consent, it must be obtained by the
unanimous written consent of all shareholders of the Company; provided, however,
that approval at a meeting or by written consent may be obtained by a lesser
degree of shareholder approval if the Board determines, in its discretion after
consultation with the Company's legal counsel, that such a lesser degree of
shareholder approval will comply with all applicable laws and will not adversely
affect the qualification of the Plan under Section 422A of the Code.
(b) If and in the event that the Company registers any class of
equity securities pursuant to Section 12 of the Exchange Act, any required
approval of the shareholders of the Company obtained after such registration
shall be solicited substantially in accordance with Section 14(a) of the
Exchange Act and the rules and regulations promulgated thereunder.
(c) If any required approval by the shareholders of the Plan
itself or of any amendment thereto is solicited at any time otherwise than in
the manner described in SECTION 19(b) hereof, then the Company shall, at or
prior to the first annual meeting of shareholders held subsequent to the later
of (1) the Effective Date or (2) the granting of an Option hereunder to an
officer or director after the Effective Date, do the following:
(i) furnish in writing to the holders entitled to vote for
the Plan substantially the same information that would be required (if
proxies to be voted with respect to approval or disapproval of the Plan or
amendment were then being solicited) by the rules and regulations in effect
under Section 14(a) of the Exchange Act at the time such information is
furnished; and
(ii) file with or mail for filing to, the Securities and
Exchange Commission four copies of the written information referred to in
SUBSECTION (i) hereof not later than the date on which such information is
first sent or given to shareholders.
Section 20. GENDER REFERENCE. The words "he", "him" or "his" shall be
deemed to include the feminine and neuter gender of such words.
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Adopted by the Board of Directors of Digital Archaeology Corporation on
September 11, 1996, and approved by the stockholders on September 11, 1996.
/s/ Michael H. Forster
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Michael H. Forster, Secretary
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