EXHIBIT 10.4
2001 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN
The purpose of this Plan is to further the growth of ProxyMed, Inc., a Florida
corporation, and its subsidiaries (the "Company") by offering an incentive to
officers, directors, other key employees and consultants of the Company to
continue in the employ of the Company, and to increase the interest of these
individuals in the Company, through additional ownership of its common stock.
2. DEFINITIONS
Whenever used in this Plan, the following terms shall have the meanings set
forth in this Section:
a) "Board of Directors" means the Board of Directors of the Company.
b) "Change of Control" means any of the following events:
i) an acquisition (other than directly from the Company) of
any voting securities of the Company (the "Voting Securities")
by any Person (as defined in the Exchange Act of 1934, as
amended (the "1934 Act") immediately after which such Person
has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the 1934 Act) of two-thirds (2/3) or more of
the combined voting power of the Company's then outstanding
Voting Securities; provided, however, that in determining
whether a Change in Control has occurred, Voting Securities
which are acquired in a Non-Control Acquisition (as
hereinafter defined) shall not constitute an acquisition which
would cause a Change in Control. A "Non-Control Acquisition"
shall mean an acquisition by (x) an employee benefit plan (or
a trust forming a part thereof) maintained by (A) the Company
or (B) any corporation or other Person of which a majority of
its voting power or its equity securities or equity interest
is owned directly or indirectly by the Company (a
"Subsidiary"), (y) the Company or any Subsidiary, or (z) any
Person in connection with a Non-Control Transaction (as
hereinafter defined).
ii) the individuals who, as of the date this Plan is approved
by the Company's Board of Directors (the "Board"), are members
of the Board (the "Incumbent Board") cease for any reason to
constitute at least two-thirds (2/3) of the Board; provided,
however, that the voluntary resignation of a member of the
Incumbent Board unrelated to a Change of Control shall not
affect such calculation; provided, further, however, that if
the election or nomination for election by the Company's
stockholders or Board of any new director was approved by a
vote of at least two-thirds (2/3) of the Incumbent Board, such
new director shall, for purposes of this Agreement, be
considered a member of the Incumbent Board; provided further,
however, that no individual shall be considered a member of
the Incumbent Board if such individual initially assumed
office as a result of either an actual or threatened
solicitation of proxies or consents by or on behalf of a
person other than the Board (a "proxy contest"), including by
reason of any agreement intended to avoid or settle any
election contest or proxy contest; or
iii) approval by stockholders of the Company of:
a) a merger, consolidation or reorganization
involving the Company, unless
(1) the stockholders of the Company,
immediately before such merger,
consolidation or reorganization, own,
directly or indirectly immediately following
such merger, consolidation or
reorganization, at least seventy-five
percent (75%) of the combined voting power
of the outstanding Voting Securities of the
corporation resulting from such merger or
consolidation or reorganization or the
ultimate entity controlling such corporation
(the "Surviving Corporation") in
substantially the same proportion as their
ownership of the Voting Securities
immediately before such merger,
consolidation or reorganization;
(2) the individuals who are members of the
Incumbent Board immediately prior to the
execution of the agreement providing for
such merger, consolidation or reorganization
constitute at least two-thirds (2/3) of the
members of the board of directors of the
Surviving Corporation and no agreement, plan
or arrangement is in place to change the
composition of the board following the
merger, consolidation or reorganization such
that the Incumbent Board would constitute
less than two-thirds (2/3) of the
reconstituted board;
(3) no person (other than the Company, any
Subsidiary, or any employee benefit plan (or
any trust forming a part thereof) maintained
by the Company, the Surviving Corporation or
any Subsidiary, or any Person who
immediately prior to such merger,
consolidation or reorganization had
Beneficial Ownership of twenty percent (20%)
or more of the then-outstanding Voting
Securities) has Beneficial Ownership of
twenty percent (20%) or more of the combined
voting power of the Surviving Corporation's
then-outstanding Voting Securities; and
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(4) a transaction described in clauses (1)
through (3) shall herein be referred to as a
"Non-Control Transaction".
b) a complete liquidation or dissolution of the
Company; or
c) an agreement for the sale or other disposition of
all of the operating assets of the Company to any
Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the outstanding Voting Securities
as a result of the acquisition of Voting Securities by the Company which, by
reducing the number of Voting Securities outstanding, increases the proportional
number of shares Beneficially Owned by the Subject Person; provided that if a
Change in Control would occur (but for the operation of this sentence) as a
result of the acquisition of Voting Securities by the Company, and after such
share acquisition by the Company the Subject Person becomes the Beneficial Owner
of any additional Voting Securities which increases the percentage of the
then-outstanding Voting Securities Beneficially Owned by the Subject Person,
then a Change in Control shall occur.
c) "Code" means the Internal Revenue Code of 1986, as amended.
d) "Committee" means the Compensation Committee or similar committee of
the Board of Directors.
e) "Common Stock" means the common stock, par value $.001 per share, of
the Company.
f) "Corporate Transaction" means any (i) reorganization or liquidation
of the Company, (ii) reclassification of the Company's capital
stock, (iii) merger of the Company with or into another corporation,
or (iv) the sale of all or substantially all the assets of the
Company, which results in a significant number of employees being
transferred to a new employer or discharged or in the creation or
severance of a parent-subsidiary relationship.
g) "Date of Grant" means, as the case may be: (i) the date the
Committee approves the grant of an Option pursuant to this Plan; or
(ii) such later date as may be specified by the Committee as the
date a particular Option granted pursuant to this Plan will become
effective.
h) "Employee" means any person employed by the Company within the
meaning of Section 3401(c) of the Code and the regulations
promulgated thereunder. For purposes of any Non-Qualified Option
only, any officer or director of the Company shall be considered an
Employee even if he is not an employee within the meaning of the
first sentence of this subsection.
i) "Exercise Price" means the price per share which must be paid upon
exercise of an Option in cash or property or a combination of both.
j) "Fair Market Value" means: (i) if the Common Stock is traded in a
market in which actual transactions are reported, the mean of the
high and low prices at which the Common Stock is reported to have
traded on the relevant date in all markets on which trading in the
Common Stock is reported or, if there is no reported sale of the
Common Stock on the relevant date, the mean of the highest reported
bid price and lowest reported asked price for the Common Stock on
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the relevant date; (ii) if the Common Stock is Publicly Traded but
only in markets in which there is no reporting of actual
transactions, the mean of the highest reported bid price and the
lowest reported asked price for the Common Stock on the relevant
date; or (iii) if the Common Stock is not Publicly Traded, the value
of a share of Common Stock as determined by the most recent
valuation prepared by an independent expert at the request of the
Committee.
k) "Incentive Stock Option" means any Option which, at the time of the
grant, is an incentive stock option within the meaning of Section
422 of the Code.
l) "Non-Qualified Option" means any Option that is not an Incentive
Stock Option pursuant to the terms of this Plan..
m) "Option" means any option granted pursuant to this Plan.
n) "Publicly Traded" means that a class of stock is required to be
registered pursuant to Section 12 of the Exchange Act, or that stock
of that class has been sold within the preceding 12 months in an
underwritten public offering, or stock that is regularly traded in a
public market.
o) "Retirement" means a Termination of Employment by reason of an
Employee's retirement at a time when the Employee is at least 65
years old, other than by reason of a termination by resignation,
discharge, death or Total Disability or the resignation, failure to
stand for re-election or dismissal from the Board of Directors.
p) "Termination of Employment" means the time when the
employee-employer relationship between an Employee and the Company
ceases to exist for any reason including, but not limited to, a
termination by resignation, discharge, death, Total Disability or
Retirement, or the resignation, failure to stand for re-election or
dismissal from the Board of Directors.
q) "Total Disability" means the inability of an Employee to perform the
material duties of his or her job by reason of a medically
determinable physical or mental impairment that can be expected to
result in death or that has lasted or can be expected to last for a
continuous period of not less than twelve (12) months. All
determinations as to the date and extent of disability of an
Employee will be made in accordance with the written policy
pertaining to Employee disability, if any, of the Company by which
the Employee is employed. In the absence of a written policy
pertaining to Employee disability, all determinations as to the date
and extent of disability of an Employee will be made by the
Committee in its sole and absolute discretion. In making its
determination, the Committee may consider the opinion of the
personal physician of the Employee or the opinion of an independent
licensed physician of the Company's choosing.
3. EFFECTIVE DATE OF THE PLAN
The "effective date" of this Plan is July 25, 2001.
4. ADMINISTRATION OF THE PLAN
Either the Board of Directors or the Committee shall be responsible for the
administration of this Plan, and shall grant Options pursuant to this Plan.
Subject to the express provisions of this Plan, the Committee shall have full
authority to interpret this Plan, to prescribe, amend and rescind rules and
regulations relating to it, and to make all other determinations which it
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believes to be necessary or advisable in administering this Plan. The
determinations of the Committee on the matters referred to in this section shall
be conclusive. The Committee may not amend this Plan. No member of the Committee
shall be liable for any act or omission in connection with the administration of
this Plan unless it resulted from the member's willful misconduct.
5. THE COMMITTEE
The Committee shall hold its meeting at such times and places as it may
determine and shall maintain written minutes of its meetings. A majority of the
members of the Committee shall constitute a quorum at any meeting of the
Committee. All determinations of the Committee shall be made by the vote of a
majority of the members who participate in a meeting. The members of the
Committee may participate in a meeting of the Committee in person or by
conference telephone or similar communications equipment by means of which all
members can hear each other. Any decision or determination by written consent of
all of the members of the Committee shall be as effective as if it had been made
by a vote of a majority of the members who participate in a meeting.
6. STOCK SUBJECT TO THE PLAN
The maximum number of shares of Common Stock as to which Options may be granted
pursuant to this Plan is 333,333.33 shares. The maximum number of shares of such
Common Stock shall be reduced each year by the grant of Options as provided
herein. If any Option expires or is canceled without being exercised in full,
the number of shares as to which the Option is not exercised will once again
become shares as to which new Options may be granted. The Common Stock that is
issued on exercise of Options may be authorized but unissued shares or shares
that have been issued and reacquired by the Company.
7. PERSONS ELIGIBLE TO RECEIVE OPTIONS
Options may be granted only to Employees, as defined in Section 2(h) above.
8. GRANTS OF OPTIONS
a) IN GENERAL. Except as otherwise provided herein, the Committee shall
have complete discretion to determine when and to which Employees
Options are to be granted, the number of shares of Common Stock as
to which Options granted to each Employee will relate, whether
Options granted to an Employee will be Incentive Stock Options or
Non-Qualified Options or partly Incentive Stock Options and partly
Non-Qualified Options and, subject to the limitations in Sections 9
and 10 below, the Exercise Price and the term of Options granted to
an Employee. Any Options that are not designated as Incentive Stock
Options when they are granted shall be Non-Qualified Options. No
grant of an Incentive Stock Option may be conditioned upon a
Non-Qualified Option's having yet been exercised in whole or in
part, and no grant of a Non-Qualified Option may be conditioned upon
an Incentive Stock Option's having not been exercised in whole or in
part.
9. OPTION PROVISIONS
a) EXERCISE PRICE. The Exercise Price of each Option shall be as
determined by the Committee; provided, however, that in the case of
Incentive Stock Options, the Exercise Price shall not be less than
100% of the Fair Market Value of the Common Stock on the Date of
Grant of the Option.
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b) TERM. The term of each Option shall be as determined by the
Committee, but in no event shall the term of an Option (whether or
not an Incentive Stock Option) be longer than ten (10) years from
the Date of Grant.
c) MANNER OF EXERCISE. An Option that has vested pursuant to the terms
of this Plan may be exercised in whole or in part, in increments of
a minimum of one hundred (100) shares, at any time, or from time to
time, during its term. To exercise an Option, the Employee
exercising the Option must deliver to the Company, at its principal
office:
i) a written notice of exercise of the Option, which states
the extent to which the Option is being exercised and which is
executed by the Employee;
ii) a check in an amount, or Common Stock with a Fair Market
Value, equal to the Exercise Price of the Option times the
number of shares being exercised, or a combination of the
foregoing; and
iii) a check equal to any withholding taxes the Company is
required to pay as a result of the exercise of the Option by
the Employee. If permitted by the Board of Directors or the
Committee, either at the time of the grant of the Option or
the time of exercise, the Employee may elect, at such time and
in such manner as the Board of Directors or the Committee may
prescribe, to satisfy such withholding obligation by (A)
delivering to the Company Common Stock (which in the case of
Common Stock acquired from the Company shall have been owned
by the Employee for at least six months prior to the delivery
date) having a fair market value equal to such withholding
obligation, or (B) requesting that the Company withhold from
the shares of Common Stock to be delivered upon the exercise a
number of shares of Common Stock having a fair market value
equal to such withholding obligation. The day on which the
Company receives all of the items specified in this subsection
shall be the date on which the Option is exercised to the
extent described in the notice of exercise.
d) DELIVERY OF STOCK CERTIFICATES. As promptly as practicable after an
Option is exercised, the Company shall cause the transfer agent to
deliver to the Employee who exercises the Option certificates,
registered in that person's name, representing the number of shares
of Common Stock that were purchased by the exercise of the Option.
Unless the Common Stock was issued in a transaction that was
registered pursuant to the Securities Act of 1933, as amended (the
"Securities Act"), each certificate may bear a legend to indicate
that if the Common Stock represented by the certificate was issued
in a transaction that was not registered pursuant to the Securities
Act, and may only be sold or transferred in a transaction that is
registered pursuant to the Securities Act or is exempt from the
registration requirements of the Securities Act.
e) VESTING OF OPTIONS. Except as otherwise provided in this Plan, the
Options granted hereunder to Employees shall be subject to such
conditions as to vesting as shall be determined by the Committee, in
its sole and absolute discretion, at the Date of Grant of the
Option, and the terms of such vesting shall be clearly set forth in
the instrument granting the Option; provided, however, that upon a
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Change of Control, any Options that have not yet vested in
accordance with the terms of this Plan and the Stock Option
Agreement shall vest upon such Change of Control. An Option shall
"vest" at such time as it becomes exercisable in accordance with
this Plan and the Stock Option Agreement. Upon exercise of an Option
and the delivery the stock certificates as provided herein, the
Common Stock acquired upon exercise of the Option shall not be
subject to forfeiture by the Employee for any reason whatsoever.
f) NON-TRANSFERABILITY OF OPTIONS. During the lifetime of a person to
whom an Option is granted pursuant to this Plan, the Option may be
exercised only by that person or by his or her guardian or legal
representative, except to the extent the Board of Directors or the
Compensation Committee shall otherwise determine, whether at the
time the option is granted or thereafter, and then only for estate
planning purposes to a trust wherein the option holder is the
trustee, and except to the extent the Board of Directors or the
Committee shall otherwise determine, whether at the time Option is
granted or thereafter. An Option may not be assigned, transferred,
sold, pledged or hypothecated in any way; shall not be subject to
levy or execution or disposition under the Bankruptcy Code of 1978,
as amended, or any other state or federal law granting relief to
creditors, whether now or hereafter in effect; and shall not be
transferable otherwise than by will or the laws of descent and
distribution. The Company will not recognize any attempt to assign,
transfer, sell, pledge, hypothecate or otherwise dispose of an
Option contrary to the provisions of this Plan, or to levy any
attachment, execution or similar process upon any Option and, except
as expressly stated in this Plan, the Company shall not be required
to, and shall not, issue Common Stock on the exercise of an Option
to anyone who claims to have acquired that Option from the person to
whom it was granted in violation of this subsection.
g) RETIREMENT OF HOLDER OF OPTION. If there is a Termination of
Employment of an Employee to whom an Option has been granted due to
Retirement, each Incentive Stock Option held by the retired
Employee, whether or not then vested, may be exercised until the
earlier of: (x) the end of the three (3) month period immediately
following the date of such Termination of Employment; or (y) the
expiration of the term specified in the Option. In the case of a
Non-Qualified Option, there shall be substituted the words, "the end
of the twelve (12) month period" for the words "the end of the three
(3) month period" in the immediately preceding sentence.
h) TOTAL DISABILITY OF HOLDER OF OPTION. If there is a Termination of
Employment of an Employee to whom an Option has been granted by
reason of his or her Total Disability, each Option held by the
Employee, whether or not then vested, may be exercised until the
earlier of: (x) the end of the twelve (12) month period immediately
following the date of such Termination of Employment; or (y) the
expiration of the term specified in the Option.
i) DEATH OF HOLDER OF OPTION. If there is a Termination of Employment
of an Employee to whom an Option has been granted by reason of (i)
his or her death, or (ii) the death of a former Employee within
three (3) months following the date of his or her Retirement (or, in
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the case of a Non-Qualified Option, within twelve (12) months
following the date of his or her Retirement), or (iii) the death of
a former Employee within twelve (12) months following the date of
his or her Termination of Employment by reason of Total Disability,
then each Option held by the person at the time of his or her death,
whether or not then vested, may be exercised by the person or
persons to whom the Option shall pass by will or by the laws of
descent and distribution (but by no other persons) until the earlier
of: (x) the end of the twelve (12) month period immediately
following the date of death (or such longer period as is permitted
by the Committee); and (y) the expiration of the term specified in
the Option, provided, however, that in no event is the term of the
Option to be deemed to expire prior to the end of three (3) months
from the date of death of the Employee.
j) TERMINATION OF EMPLOYMENT OTHER THAN FOR RETIREMENT, DEATH OR
DISABILITY. Unless the Committee or the Board of Directors states
otherwise with respect to a specific Option, if there is a
Termination of Employment of an Employee to whom an Option has been
granted pursuant to this Plan for any reason other than the
Retirement, death or Total Disability of the Employee, then all
Options held by such Employee which are then vested may be exercised
until the earlier of: (x) the three (3) month period immediately
following the date of such Termination of Employment; or (y) the
expiration of the term specified in the Option.
k) STOCK OPTION AGREEMENT. As promptly as practicable after an Employee
is granted an Option pursuant to this Plan, the Committee shall send
the Employee a document setting forth the terms and conditions of
the grant. The form of grant document shall be substantially as set
forth in Exhibit "B-1" attached hereto. Each Option granted pursuant
to this Plan must be clearly identified as to whether it is or is
not an Incentive Stock Option and shall set forth all other terms
and conditions relating to the exercise thereof. In the case of an
Incentive Stock Option, the document shall include all terms and
provisions that the Committee determines to be necessary or
desirable in order to qualify the Option as an Incentive Stock
Option within the meaning of Section 422 of the Code. If an Employee
is granted an Incentive Stock Option and a Non-Qualified Option at
the same time, the Committee shall send the Employee a separate
document relating to each of the Incentive Stock Option and the
Non-Qualified Option.
l) REGISTRATION OF PLAN. Upon a Change of Control, the Company agrees
to use its best efforts to cause the Plan to be registered under the
Securities Act at the earliest possible time. The Company shall have
no other obligations to register the Plan unless directed to do so
by the Board of the Company based on the Company's best interests.
10. SPECIAL PROVISIONS RELATING TO INCENTIVE STOCK OPTIONS
No Incentive Stock Option may be granted pursuant to this Plan after ten (10)
years from the first to occur of: (i) the date this Plan is adopted by the Board
of Directors; or (ii) the date this Plan is approved by the stockholders of the
Company. No Incentive Stock Option may be exercised after the expiration of ten
(10) years from the Date of Grant or such shorter period as is provided herein.
Notwithstanding Section 8(b) hereof, Incentive Stock Options may not be granted
to an Employee who, at the time the Option is granted, owns more than ten
percent (10%) of the total combined voting power of the stock of the Company,
unless:
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(i) the purchase price of the Common Stock pursuant to the Incentive Stock
Option is at least one hundred ten percent (110%) of the Fair Market Value of
the Common Stock on the Date of Grant; and (ii) the Incentive Stock Option by
its terms is not exercisable after the expiration of five (5) years from the
Date of Grant. The Committee is authorized, pursuant to the last sentence of
Section 422(b) of the Code, to provide at the time an Option is granted,
pursuant to the terms of such Option, that such Option shall not be treated as
an Incentive Stock Option even though it would otherwise qualify as an Incentive
Stock Option. The terms of any Incentive Stock Option granted hereunder shall,
in the hands of any individual grantee thereof, be subject to the dollar
limitations set forth in Section 422(d) of the Code (pertaining to the $100,000
per year limitation).
11. RECAPITALIZATION
a) IN GENERAL. If the Company increases the number of outstanding
shares of Common Stock through a stock dividend or a stock split, or
reduces the number of outstanding shares of Common Stock through a
combination of shares or similar recapitalization then, immediately
after the record date for the change: (i) the number of shares of
Common Stock issuable on the exercise of each outstanding Option
granted pursuant to this Plan (whether or not then vested) shall be
increased in the case of a stock dividend or a stock split, or
decreased in the case of a combination or similar recapitalization
that reduces the number of outstanding shares, by a percentage equal
to the percentage change in the number of outstanding shares of
Common Stock as a result of the stock dividend, stock split,
combination or similar recapitalization; (ii) the Exercise Price of
each outstanding Option granted pursuant to this Plan (whether or
not then vested) shall be adjusted so that the total amount to be
paid upon exercise of the Option in full will not change; and (iii)
the number of shares of Common Stock that may be issued on exercise
of Options granted pursuant to this Plan (whether or not then
vested) and that are outstanding or remain available for grant shall
be increased or decreased by a percentage equal to the percentage
change in the number of outstanding shares of Common Stock. Any
fractional shares will be rounded up to whole shares.
b) CORPORATE TRANSACTIONS. If, as a result of a Corporate Transaction
while an Option granted pursuant to this Plan is outstanding
(whether or not then vested), and the holders of the Common Stock
become entitled to receive, with respect to their Common Stock,
securities or assets other than, or in addition to, their Common
Stock, then upon exercise of that Option the holder shall receive
what the holder would have received if the holder had exercised the
Option immediately before the first Corporate Transaction that
occurred while the Option was outstanding and as if the Company had
not disposed of anything the holder would have received as a result
of that and all subsequent Corporate Transactions. the Company shall
not agree to any Corporate Transaction unless the other party to the
Corporate Transaction agrees to make available on exercise of the
Options granted pursuant to this Plan that are outstanding at the
time of the Corporate Transaction, the securities or other assets
the holders of those Options are entitled pursuant to this
subsection to receive.
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12. RIGHTS OF OPTION HOLDER
a) STOCKHOLDER. The holder of an Option (whether or not then vested)
shall not have any rights as a stockholder by reason of holding that
Option. Upon exercise of an Option granted pursuant to this Plan,
the holder shall be deemed to acquire the rights of a stockholder
when, but not before, the issuance of Common Stock as a result of
the exercise is recorded in the stock transfer records of the
Company.
b) EMPLOYMENT. Nothing in this Plan or in the grant of an Option shall
confer upon any Employee the right to continue in the employ of the
Company or shall interfere with or restrict in any way the rights of
the Company to discharge any Employee at any time for any reason
whatsoever, with or without cause.
13. LAWS AND REGULATIONS
The obligation of the Company to sell and deliver shares of Common Stock on
vesting and exercise of Options granted pursuant to this Plan shall be subject
to the condition that counsel for the Company be satisfied that the sale and
delivery thereof will not violate the Securities Act or any other applicable
laws, rules or regulations. In addition, the Company may, as a condition to such
sale and delivery, require the Employee 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 pursuant
to such securities laws.
14. WITHHOLDING OF TAXES
a) IN GENERAL. In addition to the requirement set forth in Section 9(c)
above that, in order to exercise an Option granted pursuant to this
Plan a person must make a payment to the Company or authorize
withholding in order to enable the Company to pay any withholding
taxes due as a result of the exercise of that Option, if an Employee
who exercised an Incentive Stock Option disposes of shares of Common
Stock acquired through exercise of that Incentive Stock Option
either (x) within two years after the Date of Grant of the Incentive
Stock Option or (y) within one year after the issuance of the shares
on exercise of the Incentive Stock Option then, promptly thereafter,
the Employee shall notify the Company of the occurrence of the event
and the amount realized upon the disposition of such Common Stock by
the Employee, and pay any federal, state and other taxes due as a
result thereof.
b) WITHHOLDING OF TAXES. If, whether because of a disposition of Common
Stock acquired on exercise of an Incentive Stock Option, the
exercise of a Non-Qualified Option or otherwise, the Company becomes
required to pay withholding taxes to any federal, state or other
taxing authority and the Employee fails to provide the Company with
the funds with which to pay that withholding tax, then the Company
may withhold, subject to applicable state law, up to 50% of each
payment of salary or bonus to the Employee (which will be in
addition to any other required or permitted withholding), until the
Company has been reimbursed for the entire withholding tax it was
required to pay.
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15. RESERVATION OF SHARES
The Company shall at all times keep reserved for issuance on exercise of Options
granted pursuant to this Plan a number of authorized but unissued or reacquired
shares of Common Stock equal to the maximum number of shares the Company may be
required to issue on exercise of outstanding Options (whether or not then
vested) granted pursuant to this Plan.
16. AMENDMENT OF THE PLAN
The Board of Directors may, at any time and from time to time, modify or amend
this Plan in any respect effective at any date the Board of Directors
determines; provided, however, that, without the approval of the stockholders of
the Company the Board of Directors may not increase the maximum number of
Incentive Stock Options that may be granted under the Plan. No modification or
amendment of this Plan shall, without the consent of the holder of an
outstanding Option (whether nor not then vested), adversely affect the holder's
rights pursuant to that Option.
17. TERMINATION OF THE PLAN
The Board of Directors may suspend or terminate this Plan at any time or from
time to time, but no such action shall adversely affect the rights of a person
holding an outstanding Option, whether or not then vested, granted pursuant to
this Plan prior to that date.
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