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EXHIBIT 10.3
F.A.S.T. MANAGEMENT GROUP, INC.
1997 STOCK OPTION PLAN
SECTION 1. Purpose. The purpose of this 1997 Stock Option Plan (this
"Plan") is to provide a means whereby F.A.S.T. MANAGEMENT GROUP, Inc. (the
"Company") or any parent or subsidiary of the Company, as defined in Subsection
5.9 (the "related Corporations"), may continue to attract, motivate and retain
selected employees, officers, independent contractors and directors (subject to
the restrictions contained in Sections 2 and 4) and to encourage stock ownership
in the Company through granting incentive stock options and/or nonqualified
stock options to purchase the Common Stock of the Company (as defined in Section
3), so that such key employees will more closely identify their interests with
those of the Company and its shareholders.
SECTION 2. Administration. This Plan shall be administered by the Board
of Directors of the Company (the "Board") or, in the event the Board shall
appoint or authorize a committee to administer this Plan, by such committee. The
administrator of this Plan shall hereinafter be referred to as the "Plan
Administrator."
2.1 Procedures. The Board may designate one of the members of
the Plan Administrator as chairperson. The Plan Administrator may hold meetings
at such times and places as it shall determine. The acts of a majority of the
members of the Plan Administrator present at meetings at which a quorum exists,
or acts reduced to or approved in writing by all Plan Administrator members,
shall be valid acts of the Plan Administrator.
2.2 Responsibilities. Except for the terms and conditions
explicitly required in this Plan, the Plan Administrator shall have the
authority, in its discretion, to determine all matters relating to the options
to be granted under this Plan, including selection of the individuals to be
granted options, the number of shares to be subject to each option, the exercise
price, and all other terms and conditions of the options. Grants under this Plan
need not be identical in any respect, even when made simultaneously. The
interpretation and construction by the Plan Administrator of any terms or
provisions of this Plan or any option issued under this Plan, or of any rule or
regulation promulgated in connection with this Plan, shall be conclusive and
binding on all interested parties, so long as such interpretation and
construction with respect to incentive stock options correspond to the
requirements of Section 422 of the Internal Revenue Code (the "Code"), as
amended, and the regulations thereunder.
2.3 Section 16(b) Compliance and Bifurcation of Plan. In the
event the Company registers any of its equity securities pursuant to Section
12(b) or 12(g) of the Exchange Act, it is the intention of the Company that this
Plan, and options granted under this Plan, comply in all respects with Rule
16b-3 under the Exchange Act and, if any Plan provision is later found not to be
in compliance with such Section, the provision shall be deemed null and void,
and in all events this Plan shall be construed in favor of its meeting the
requirements of Rule 16b-3. Notwithstanding anything in this Plan to the
contrary, the Board, in its absolute discretion, may bifurcate this Plan so as
to restrict, limit or condition the use of any provision of this Plan to
participants who are officers and directors subject to Section 16(b) of the
Exchange Act without so restricting, limiting or conditioning other Plan
participants.
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SECTION 3. Stock Subject to This Plan. The stock subject to this Plan
shall be the Company's Common Stock (the "Common Stock"), presently authorized
but unissued or now held or subsequently acquired by the Company as treasury
shares. Subject to adjustment as provided in Section 7 of this Plan, the
aggregate amount of Common Stock to be delivered upon the exercise of all
options granted under this Plan shall not exceed 700,000 shares as such Common
Stock was constituted on the effective date of this Plan. If any option granted
under this Plan expires or is surrendered, exchanged for another option,
canceled or terminated for any reason without having been exercised in full, the
unpurchased shares subject to such option shall again be available for purposes
of this Plan, including for replacement options which may be granted in exchange
for such surrendered, canceled or terminated options.
SECTION 4. Eligibility. An incentive stock option may be granted only
to an individual who, at the time the option is granted, is an employee of the
Company and who the Board may from time to time select for participation in this
Plan. Members of the Board shall not be eligible for grants of incentive stock
options unless they are also employees of the Company. At the discretion of the
Plan Administrator, employees, officers, independent contractors and directors
of the Company (including nonemployee directors) may receive nonqualified stock
options. Any party to whom an option is granted under this Plan shall be
referred to in this Plan as an "Optionee."
SECTION 5. Terms and Conditions of Options. Options granted under this
Plan shall be evidenced by written agreements which shall contain such terms,
conditions, limitations and restrictions as the Plan Administrator shall deem
advisable and which are not inconsistent with this Plan. Notwithstanding the
foregoing, options shall include or incorporate by reference the following terms
and conditions:
5.1 Number of Shares. The maximum number of shares that may be
purchased pursuant to the exercise of each option shall be as established by the
Plan Administrator.
5.2 Price of Shares. The price per share at which each option
is exercisable (the "exercise price") shall be as established by the Plan
Administrator, provided that the Plan Administrator shall act in good faith to
establish the exercise price as follows:
5.2.1 Incentive Stock Options. With respect to
incentive stock options intended to qualify under Section 422 of the Internal
Revenue Code, and subject to Subsection 5.2.3 below, the exercise price shall be
not less than the fair market value per share of the Common Stock at the time
the option is granted.
5.2.2 Nonqualified Stock Options. With respect to
nonqualified stock options, the exercise price shall be the amount set by the
Plan Administrator, provided that if the Company has registered any of its
equity securities pursuant to Section 12(b) or 12(g) of the Exchange Act, the
exercise price shall not be less than 85 percent of the fair market value of a
share of the Common Stock at the time the option is granted.
5.2.3 Incentive Stock Options to Greater than 10%
Shareholders. With respect to incentive stock options granted to greater than
10% shareholders, the exercise price shall be as required by Section 6.
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5.2.4 Fair Market Value. The fair market value per
share of the Common Stock for the purpose of determining the exercise price
under this Section 5.2 shall be determined by the Board in good faith at the
time the option is granted.
5.3 Term and Maturity. Subject to the restrictions contained
in Section 6 with respect to granting incentive stock options to greater than
10% shareholders, the term of each incentive stock option shall be ten (10)
years from the date it is granted unless a shorter or longer period of time is
established by the Plan Administrator, but in no event shall the term of any
incentive stock option exceed 10 years. The term of each nonqualified stock
option shall also be ten (10) years from the date it is granted unless a shorter
period of time is established by the Plan Administrator. To ensure that the
Company or related corporation will achieve the purpose and receive the benefits
contemplated in this Plan, any option granted to any Optionee under this Plan
shall, unless the condition of this sentence is waived or modified in the
agreement evidencing the option or by resolution adopted by the Plan
Administrator, be exercisable according to the following schedule:
Period of Optionee's
Continuous Relationship
With the Company or Related
Corporation From the Date Portion of Total Option
the Option Is Granted Which Is Exercisable
--------------------------- -----------------------
after 1 year 25%
after 2 years 50%
after 3 years 75%
after 4 years 100%
5.4 Exercise. Subject to the vesting schedule described in
subsection 5.3 above and to any additional holding period required by applicable
law, each option may be exercised in whole or in part; provided, however, that
only whole shares will be issued pursuant to the exercise of any option. During
an Optionee's lifetime, any incentive stock options granted under this Plan are
personal to him or her and are exercisable solely by such Optionee. Options
shall be exercised by delivery to the Company of notice of the number of shares
with respect to which the option is exercised, together with payment of the
exercise price.
5.5 Payment of Exercise Price. Payment of the option exercise
price shall be made in full at the time the notice of exercise of the option is
delivered to the Company and shall be in cash, bank certified or cashier's check
or personal check (unless at the time of exercise the Plan Administrator in a
particular case determines not to accept a personal check) for the Class A
Common Stock being purchased.
The Plan Administrator can determine at the time the option is
granted for incentive stock options, or at any time before exercise for
nonqualified stock options, that additional forms of payment will be permitted,
including installment payments on such terms and over such period as the Plan
Administrator may determine in its discretion. To the extent permitted by the
Plan Administrator and applicable laws and regulations (including, but not
limited to, federal tax and
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securities laws and regulations and state corporate law), an option may be
exercised by:
(a) delivery of shares of stock of the Company held by an
Optionee having a fair market value equal to the exercise price, such fair
market value to be determined in good faith by the Plan Administrator;
(b) delivery of a full-recourse promissory note executed by
the Optionee, provided that (i) such note delivered in connection with an
incentive stock option shall, and such note delivered in connection with a
nonqualified stock option may, in the sole discretion of the Plan Administrator,
bear interest at a rate specified by the Plan Administrator but in no case less
than the rate required to avoid imputation of interest (taking into account any
exceptions to the imputed interest rules) for federal income tax purposes; (ii)
the Plan Administrator in its sole discretion shall specify the term and other
provisions of such note at the time an incentive stock option is granted or at
any time prior to exercise of a nonqualified stock option; (iii) the Plan
Administrator may require that the Optionee pledge the Optionee's shares to the
Company for the purpose of securing the payment of such note and may require
that the certificate representing such shares be held in escrow in order to
perfect the Company's security interest; (iv) the note provides that 90 days
following the Optionee's termination of employment with the Company or a related
entity, the entire outstanding balance under the note shall become due and
payable, if not previously due and payable; and (v) the Plan Administrator in
its sole discretion may at any time restrict or rescind this right upon
notification to the Optionee;
(c) delivery of a properly executed exercise notice, together
with irrevocable instructions to a broker, all in accordance with the
regulations of the Federal Reserve Board, to promptly deliver to the Company the
amount of sale or loan proceeds to pay the exercise price and any federal, state
or local withholding tax obligations that may arise in connection with the
exercise; provided, that the Plan Administrator, in its sole discretion, may at
any time determine that this Subparagraph (c), to the extent the instructions to
the broker call for an immediate sale of the shares, shall not be applicable to
any Optionee who is subject to Section 16(b) of the Exchange Act if such
transaction would result in a violation of Section 16(b), or is not an employee
at the time of exercise;
(d) delivery of a properly executed exercise notice, together
with a request by the Optionee for the Company to pay the exercise price by
withholding from the shares that would otherwise be issued that number of shares
having a fair market value equal to the option exercise price; provided, the
Plan Administrator retains complete discretion to honor or deny the Optionee's
request for such a method of exercise.
5.6 Withholding Tax Requirement. The Company or any related
entity shall have the right to retain and withhold from any payment of cash or
Class A Common Stock under this Plan the amount of taxes required by any
government to be withheld or otherwise deducted and paid with respect to such
payment. At its discretion, the Company may require an Optionee receiving shares
of Class A Common Stock to reimburse the Company or a related entity for any
such taxes required to be withheld and may withhold any distribution in whole or
in part until the Company, or related entity, is so reimbursed. In lieu of such
withholding or reimbursement, the Company (or related entity) shall have the
right to withhold from any other cash amounts due or to become due from the
Company (or related entity) to the Optionee an amount equal to such taxes or
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to retain and withhold a number of shares having a market value not less than
the amount of such taxes required to be withheld as reimbursement for any such
taxes and cancel (in whole or in part) any such shares so withheld.
5.7 Nontransferability of Option. Options granted under this
Plan and the rights and privileges conferred by this Plan may not be
transferred, assigned, pledged or hypothecated in any manner (whether by
operation of law or otherwise) other than by will or by the applicable laws of
descent and distribution; provided, with respect to a non-qualified stock
option, an Optionee may transfer the option to a revocable trust created by the
Optionee for the benefit of his or her descendants, to an immediate family
member or to a partnership in which only immediate family members or such trusts
are partners. Options under this Plan shall not be subject to execution,
attachment or similar process. Any attempt to transfer, assign, pledge,
hypothecate or otherwise dispose of any option under this Plan or of any right
or privilege conferred by this Plan, contrary to the Code or to the provisions
of this Plan, or the sale or levy or any attachment or similar process upon the
rights and privileges conferred by this Plan shall be null and void.
Notwithstanding the foregoing, an Optionee may during the Optionee's lifetime,
designate a person who may exercise the option after the Optionee's death by
giving written notice of such designation to the Plan Administrator. Such
designation may be changed from time to time by the Optionee by giving written
notice to the Plan Administrator revoking any earlier designation and making a
new designation.
5.8 Termination of Relationship.
5.8.1 Termination Other Than Termination For Cause,
Death or Total Disability. If the Optionee's relationship with the Company or
any related corporation ceases for any reason other than termination for cause,
death or total disability, and unless by its terms the option sooner terminates
or expires, then the Optionee may exercise, for a three (3) month period after
such cessation, that portion of the Optionee's option which is exercisable at
the time of such cessation. The Optionee's option, however, shall terminate at
the end of the three (3) month period following such cessation as to all Shares
for which it has not been exercised, unless such provision is waived in the
agreement evidencing the option or by resolution adopted by the Plan
Administrator. If, in the case of an incentive stock option, an Optionee's
relationship with the Company or related corporation changes (i.e., from
employee to nonemployee, such as a consultant), such change shall constitute a
termination of an Optionee's employment with the Company or related corporation
and the Optionee's incentive stock option shall terminate in accordance with
this subsection. Upon the expiration of the three (3) month period following
cessation of employment, the Plan Administrator shall have sole discretion in a
particular circumstance to extend the exercise period following such cessation
beyond that specified above. If, however, in the case of an incentive stock
option, the Optionee does not exercise the Optionee's option within three (3)
months after cessation of employment, the option will no longer qualify as an
incentive stock option under the Code.
5.8.2 Termination For Cause. If an Optionee is
terminated for cause, any option granted under this Plan shall automatically
terminate as of the first discovery by the Company of any reason for termination
for cause, and such Optionee shall have no right to purchase any shares pursuant
to such option. "Termination for cause" shall mean dismissal for dishonesty,
conviction or confession of a crime punishable by law (except minor violations),
fraud,
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misconduct or disclosure of confidential information. If an Optionee is
suspended pending an investigation of whether or not the Optionee shall be
terminated for cause, all Optionee's rights under any option granted under this
Plan shall likewise be suspended during the period of investigation.
5.8.3 Termination Because of Total Disability. If an
Optionee's relationship with the Company or any related corporation ceases
because of a total disability, the Optionee's option shall not terminate or, in
the case of an incentive stock option, cease to be treated as an incentive stock
option until the end of the 12-month period following such cessation (unless by
its terms it sooner terminates and expires). As used in this Plan, the term
"total disability" refers to a mental or physical impairment of the Optionee
which is expected to result in death or which has lasted or is expected to last
for a continuous period of 12 months or more and which causes the Optionee to be
unable, in the opinion of the Company and two independent physicians, to perform
his or her duties for the Company and to be engaged in any substantial gainful
activity. Total disability shall be deemed to have occurred on the first day
after the Company and the two independent physicians have furnished their
opinion of total disability to the Plan Administrator.
5.8.4 Transfer of Relationship Between Company and
Related Company. For purposes of this subsection 5.9, a transfer of relationship
between or among the Company and/or any related corporation (as defined in
Section 5.9.6 below) shall not be deemed to constitute a cessation of
relationship with the Company or any of its related corporations.
5.8.5 Military Leave, Sick Leave and Bona Fide Leave
of Absence. For purposes of this subsection 5.9, with respect to incentive stock
options, employment shall be deemed to continue while the Optionee is on
military leave, sick leave or other bona fide leave of absence (as determined by
the Plan Administrator). The foregoing notwithstanding, employment shall not be
deemed to continue beyond the first 90 days of such leave, unless the Optionee's
reemployment rights are guaranteed by statute or by contract.
5.8.6 Related Corporation. As used in this Plan, the
term "related corporation," when referring to a subsidiary corporation, shall
mean any corporation (other than the Company) which, at the time of the granting
of the option, is in an unbroken chain of corporations ending with the Company,
if stock possessing 50% or more of the total combined voting power of all
classes of stock of each of the corporations other than the Company is owned by
one of the other corporations in such chain. When referring to a parent
corporation, the term "related corporation" shall mean any corporation in an
unbroken chain of corporations ending with the Company if, at the time of the
granting of the option, each of the corporations other than the Company owns
stock possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
5.9 Death of Optionee. If an Optionee dies while he or she has
a relationship with the Company or any related corporation or dies within the
three (3) month period (or 12-month period in the case of totally disabled
Optionees) following cessation of such relationship, any option held by such
Optionee to the extent that the Optionee would have been entitled to exercise
such option, may be exercised within one year after his or her death by the
personal representative of his or her estate or by the person or persons to whom
the Optionee's rights under the option shall pass by will or by the applicable
laws of descent and distribution.
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5.10 Status of Shareholder. Neither the Optionee nor any party
to which the Optionee's rights and privileges under the option may pass shall
be, or have any of the rights or privileges of, a shareholder of the Company
with respect to any of the shares issuable upon the exercise of any option
granted under this Plan unless and until such option has been exercised.
5.11 Continuation of Employment. Nothing in this Plan or in
any option granted pursuant to this Plan shall confer upon any Optionee any
right to continue in the employ of the Company or of a related corporation, or
to interfere in any way with the right of the Company or of any related
corporation to terminate his or her employment or other relationship with the
Company at any time.
5.12 Modification and Amendment of Option. Subject to the
requirements of Code Section 422 with respect to incentive stock options and to
the terms and conditions and within the limitations of this Plan, the Plan
Administrator may modify or amend outstanding options granted under this Plan.
The modification or amendment of an outstanding option shall not, without the
consent of the Optionee, impair or diminish any of his or her rights or any of
the obligations of the Company under such option. Except as otherwise provided
in this Plan, no outstanding option shall be terminated without the consent of
the Optionee. Unless the Optionee agrees otherwise, any changes or adjustments
made to outstanding incentive stock options granted under this Plan shall be
made in such a manner so as not to constitute a "modification" as defined in
Code Section 424(h) and so as not to cause any incentive stock option issued
hereunder to fail to continue to qualify as an incentive stock option as defined
in Code Section 422(b).
5.13 Limitation on Value for Incentive Stock Options. As to
all incentive stock options granted under the terms of this Plan, to the extent
that the aggregate fair market value (determined at the time the incentive stock
option is granted) of the stock with respect to which incentive stock options
are exercisable for the first time by the Optionee during any calendar year
(under this Plan and all other incentive stock option plans of the Company, a
related corporation or a predecessor corporation) exceeds $100,000, those
options (or the portion of an option) beyond the $100,000 threshold shall be
treated as nonqualified stock options. The previous sentence shall not apply if
the Internal Revenue Service publicly rules, issues a private ruling to the
Company, any Optionee, or any legatee, personal representative or distributee of
an Optionee or issues regulations changing or eliminating such annual limit.
5.14 Shareholders' Agreement. To the extent required by the
Plan Administrator upon exercise of an option the Optionee shall agree to enter
into and be bound by the agreement then in effect, if any, between the Company
and its shareholders relating to the repurchase by the Company of its
outstanding Class A Common Stock.
SECTION 6. Greater Than 10% Shareholders.
6.1 Exercise Price and Term of Incentive Stock Options. If
incentive stock options are granted under this Plan to employees who own more
than 10% of the total combined voting power of all classes of stock of the
Company or any related corporation, the term of such incentive stock options
shall not exceed five years and the exercise price shall be not less than 110%
of the fair market value of the Common Stock at the time the incentive stock
option is granted. This
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provision shall control notwithstanding any contrary terms contained in an
option agreement or any other document.
6.2 Attribution Rule. For purposes of subsection 6.1, in
determining stock ownership, an employee shall be deemed to own the stock owned,
directly or indirectly, by or for his brothers, sisters, spouse, ancestors and
lineal descendants. Stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be deemed to be owned
proportionately by or for its shareholders, partners or beneficiaries. If an
employee or a person related to the employee owns an unexercised option or
warrant to purchase stock of the Company, the stock subject to that portion of
the option or warrant which is unexercised shall not be counted in determining
stock ownership. For purposes of this Section 6, stock owned by an employee
shall include all stock actually issued and outstanding immediately before the
grant of the incentive stock option to the employee.
SECTION 7. Adjustments Upon Changes in Capitalization. The aggregate
number and class of shares for which options may be granted under this Plan, the
number and class of shares covered by each outstanding option and the exercise
price per share thereof (but not the total price), and each such option, shall
all be proportionately adjusted for any increase or decrease in the number of
issued shares of Common Stock of the Company resulting from a split-up or
consolidation of shares or any like capital adjustment, or the payment of any
stock dividend.
7.1 Effect of Liquidation, Reorganization or Change in
Control.
7.1.1 Cash, Stock or Other Property for Stock. Except
as provided in subsection 7.1.2, upon a merger (other than a merger of the
Company in which the holders of Common Stock immediately prior to the merger
have the same proportionate ownership of Common Stock in the surviving
corporation immediately after the merger), consolidation, acquisition of
property or stock, separation, reorganization (other than a mere reincorporation
or the creation of a holding company) or liquidation of the Company, as a result
of which the shareholders of the Company receive cash, stock or other property
in exchange for or in connection with their shares of Common Stock, any option
granted under this plan shall terminate, but the Optionee shall have the right
immediately prior to any such merger, consolidation, acquisition of property or
stock, separation, reorganization or liquidation to exercise such option in
whole or in part, to the extent the vesting requirements set forth in the option
agreement have been satisfied, unless stated otherwise in the optionee's
individual option agreement.
7.1.2 Conversion of Options on Stock for Stock
Exchange. If the shareholders of the Company receive capital stock of another
corporation ("Exchange Stock") in exchange for their shares of Common Stock in
any transaction involving a merger (other than a merger of the Company in which
the holders of Common Stock immediately prior to the merger have the same
proportionate ownership of Common Stock in the surviving corporation immediately
after the merger), consolidation, acquisition of property or stock, separation
or reorganization (other than a mere reincorporation or the creation of a
holding company), all options granted under this Plan shall be converted into
options to purchase shares of Exchange Stock unless the Company and the
corporation issuing the Exchange Stock, in their sole discretion, determine that
any or all such options granted under this Plan shall not be converted into
options to purchase shares of Exchange Stock, but instead shall terminate in
accordance with the provisions of subsection 7.1.1. The
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amount and price of converted options shall be determined by adjusting the
amount and price of the options granted under this Plan in the same proportion
as used for determining the number of shares of Exchange Stock the holders of
the Common Stock receive in such merger, consolidation, acquisition of property
or stock, separation or reorganization. Unless accelerated by the Board, the
vesting schedule set forth in the option agreement shall continue to apply for
the Exchange Stock.
7.1.3 Change in Control. In the event of a "Change in
Control", as defined below, of the Company, unless otherwise determined by the
Board prior to the occurrence of such Change in Control, any options or portions
of such options outstanding as of the date such Change in Control is determined
to have occurred that are not yet fully vested on such date shall become
immediately exercisable in full.
7.1.4 Definition of "Change in Control." For purposes
of this Plan, a "Change in Control" shall mean (a) the first approval by the
Board or by the stockholders of the Company of an Extraordinary Event, (b) a
Purchase, or (c) a Board Change. For purposes of the Plan, an "Extraordinary
Event" shall mean any of the following actions:
(i) any consolidation or merger of the Company in which the
Company is not the continuing or surviving corporation or pursuant to
which shares of Common Stock would be converted into cash, securities
or other property, other than a merger of the Company in which the
holders of Common Stock immediately prior to the merger have the same
proportionate ownership of common stock of the surviving corporation
immediately after the merger;
(ii) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, the assets of the Company; or
(iii) the adoption of any plan or proposal for liquidation or
dissolution of the Company.
For purposes of the Plan, a "Purchase" shall mean the
acquisition by any person (as such term is defined in Section 13(d) of
the Exchange Act) of any shares of Common Stock or securities
convertible into Common Stock) without the prior approval of a majority
of the Continuing Directors (as defined below) of the Company, if after
making such acquisition such person is the beneficial owner (as such
term is defined in Rule 13d-3 under the Exchange Act) directly or
indirectly of Securities of the Company representing 20% or more of the
combined voting power of the Company's then outstanding securities
(calculated as provided in paragraph (d) of such Rule 13d-3). For
purposes of the Plan, a "Board Change" shall have occurred if
individuals who constitute the Board of the Company at the time of
adoption of this Plan (the "Continuing Directors") cease for any reason
to constitute at least a majority of the Board, provided that any
person becoming a Director subsequent to the date of adoption of this
Plan whose nomination for election was approved by a vote of at least a
majority of the Continuing Directors (other than a nomination of an
individual whose initial assumption of office is in connection with an
actual threatened election contest relating to the election of the
Directors of the Company, as such terms are used in Rule 14a-11 of
Regulation 14A under the Exchange Act) shall be deemed to be a
Continuing Director.
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7.2 Fractional Shares. In the event of any adjustment in the
number of shares covered by any option, any fractional shares resulting from
such adjustment shall be disregarded and each such option shall cover only the
number of full shares resulting from such adjustment.
7.3 Determination of Board to Be Final. All Section 7
adjustments shall be made by the Board, and its determination as to what
adjustments shall be made, and the extent of such adjustments, shall be final,
binding and conclusive. Unless an Optionee agrees otherwise, any change or
adjustment to an incentive stock option shall be made in such a manner so as not
to constitute a "modification" as defined in Code Section 424(h) and so as not
to cause his or her incentive stock option issued hereunder to fail to continue
to qualify as an incentive stock option as defined in Code Section 422(b).
SECTION 8. Securities Regulation. Shares shall not be issued with
respect to an option granted under this Plan unless the exercise of such option
and the issuance and delivery of such shares pursuant to the exercise of such
option shall comply with all relevant provisions of law, including, without
limitation, any applicable state securities laws, the Securities Act of 1933, as
amended, the Exchange Act, the rules and regulations promulgated thereunder, and
the requirements of any 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, including the availability of an exemption from
registration for the issuance and sale of any shares under this Plan. Inability
of the Company to obtain from any regulatory body having jurisdiction, the
authority deemed by the Company's counsel to be necessary for the lawful
issuance and sale of any shares under this Plan or the unavailability of an
exemption from registration for the issuance and sale of any shares under this
Plan shall relieve the Company of any liability in respect of the nonissuance or
sale of such shares as to which such requisite authority shall not have been
obtained.
As a condition to the exercise of an option, the Company may require
the Optionee to represent and warrant at the time of any such exercise that the
shares are being purchased only for investment and without any present intention
to sell or distribute such shares if, in the opinion of counsel for the Company,
such a representation is required by any relevant provision of the
aforementioned laws. At the option of the Company, a stop-transfer order against
any shares of stock may be placed on the official stock books and records of the
Company, and a legend indicating that the stock may not be pledged, sold or
otherwise transferred unless an opinion of counsel is provided (concurred in by
counsel for the Company) stating that such transfer is not in violation of any
applicable law or regulation, may be stamped on stock certificates in order to
assure exemption from registration. The Plan Administrator may also require such
other action or agreement by the Optionees as may from time to time be necessary
to comply with the federal and state securities laws. THIS PROVISION SHALL NOT
OBLIGATE THE COMPANY TO UNDERTAKE REGISTRATION OF THE OPTIONS OR STOCK
HEREUNDER.
Should any of the Company's capital stock of the same class as the
stock subject to options granted under this Plan be listed on a national
securities exchange, all stock issued under this Plan if not previously listed
on such exchange shall be authorized by that exchange for listing on such
exchange prior to the issuance of such stock.
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SECTION 9. Amendment and Termination.
9.1 Board Action. The Board may at any time suspend, amend or
terminate this Plan, provided that except as set forth in Section 7, the
approval of the Company's shareholders is necessary within 12 months before or
after the adoption by the Board of any amendment which will:
(a) increase the number of shares which are to be
reserved for the issuance of options under this Plan;
(b) permit the granting of stock options to a class
of persons other than those presently permitted to receive stock options under
this Plan; or
(c) require shareholder approval under applicable
law.
Any amendment made to this Plan which would constitute a "modification"
to incentive stock options outstanding on the date of such amendment, shall not
be applicable to such outstanding incentive stock options, but shall have
prospective effect only, unless the Optionee agrees otherwise.
9.2 Automatic Termination. Unless sooner terminated by the
Board, this Plan shall terminate ten years from the earlier of (a) the date on
which this Plan is adopted by the Board or (b) the date on which this Plan is
approved by the shareholders of the Company. No option may be granted after such
termination or during any suspension of this Plan. The amendment or termination
of this Plan shall not, without the consent of the option holder, alter or
impair any rights or obligations under any option previously granted under this
Plan.
SECTION 10. Effectiveness of This Plan. This Plan shall become
effective upon adoption by the Board so long as it is approved by the Company's
shareholders any time within 12 months before or after the adoption of this
Plan.
Adopted by the Board of Directors on May 14, 1997, and approved by the
shareholders on May 14, 1997.