1
EXHIBIT 10.3
CYTRX CORPORATION 1994 STOCK OPTION PLAN
(amended and restated as of April 16, 1997)
2
CYTRX CORPORATION
1994 STOCK OPTION PLAN
AMENDED AND RESTATED AS OF APRIL 16, 1997
The purpose of the 1994 Stock Option Plan (the "Plan") of CytRx
Corporation (the "Company") is to promote the interests of the Company by
providing incentives to (i) designated officers and other employees of the
Company or a Subsidiary Corporation (as defined herein), (ii) members of the
Board of Directors (the "Board") and (iii) independent contractors and
consultants (who may be individuals or entities) who perform services for the
Company, to encourage them to acquire a proprietary interest, or to increase
their proprietary interest, in the Company. The Company believes that the Plan
will cause participants to contribute materially to the growth of the Company,
thereby benefiting the Company's stockholders. For purposes of the Plan, the
terms "Parent Corporation" and "Subsidiary Corporation" shall have the meanings
set forth in subsections (e) and (f) of Section 424 of the Internal Revenue
Code of 1986, as amended (the "Code").
SECTION 1. Administration
The Plan shall be administered and interpreted by a committee of
the Board (the "Committee") consisting of not less than two persons, all of
whom shall be (i) "outside directors" as that term is used in Section 162(m) of
the Code and the regulations promulgated thereunder or any successor
provisions, and (ii) "non-employee directors" as such term is defined in Rule
16b-3 promulgated under Section 16 of the Securities Exchange Act of 1934 (the
"Exchange Act") or any successor provisions. The Committee shall have the sole
authority to determine (i) who is eligible to receive Grants (as defined in
Section 2 below) under the Plan, (ii) the type, size and terms of each Grant
under the Plan (subject to Section 4 below), (iii) the time when each Grant
will be made and the duration of any exercise or restriction period; (iv) any
restrictions on resale applicable to the shares to be issued or transferred
pursuant to the Grant; and (v) any other matters arising under the Plan.
Non-Employee Directors of the Board, as defined below, may receive Grants only
pursuant to the provisions of Section 5(j). The Committee may, if it so
desires, base any of the foregoing determinations upon the recommendations of
management of the Company. The Committee shall have full power and authority
to administer and interpret the Plan and to adopt or amend such rules,
regulations, agreements and instruments as it may deem appropriate for the
proper administration of the Plan. The Committee's interpretations of the Plan
and all determinations made by the Committee pursuant to the powers vested in
it hereunder shall be conclusive and binding on all persons having any
interests in the Plan or in any Grants under the Plan. No person acting under
this Section shall be held liable for any action or determination made in good
faith with respect to the Plan or any Grant under the Plan.
SECTION 2. Grants
Grants under the Plan shall consist of Incentive Stock Options (as
defined in Section 5(b) below) and Nonqualified Stock Options (as defined in
Section 5(b) below) (hereinafter collectively referred to as "Grants" or "Stock
Options"). All Grants shall be subject to the terms and conditions set forth
herein and to such other terms and conditions of any nature (as long as they
are not inconsistent with the Plan) as the Committee deems appropriate and
specifies in writing to the participant in the document designating the Grant
(the "Grant Letter"). The Committee shall approve the form and provisions of
each Grant Letter. Grants under any section
3
of the Plan need not be uniform as among the participants receiving the same
type of Grant, and Grants under two or more sections of the Plan may be
combined in one Grant Letter; provided, however, that Grants to Non-Employee
Directors, as defined below, shall be made only in accordance with the
provisions of Section 5(j).
SECTION 3. Shares Subject to the Plan
(a) The aggregate number of shares of the Common Stock, par value
$.001 per share ("Common Stock"), of the Company that may be issued or
transferred under the Plan is 1,500,000, subject to adjustment pursuant to
Section 3(b) below. The maximum number of shares of Common Stock for which any
Grantee may be granted Stock Options under the Plan is 500,000, subject to
adjustment pursuant to Section 3(b) below. The shares may be authorized but
unissued shares or reacquired shares. If and to the extent that Stock Options
granted under the Plan terminate, expire or are canceled without having been
exercised (including shares canceled as part of an exchange of Grants), the
shares subject to such Grant shall again be available for subsequent Grants
under the Plan.
(b) If any change is made to the Common Stock (whether by reason
of merger, consolidation, reorganization, recapitalization, stock dividend,
stock split, combination of shares, or exchange of shares or any other change
in capital structure made without receipt of consideration), then unless such
event or change results in the termination of all outstanding Grants under the
Plan, the Committee shall preserve the value of the outstanding Grants by
adjusting the maximum number and class of shares issuable under the Plan to
reflect the effect of such event or change in the Company's capital structure,
and by making appropriate adjustments to the number and class of shares, the
exercise price of each outstanding Stock Option and otherwise, except that any
fractional shares resulting from such adjustments shall be eliminated by
rounding any portion of a share equal to .500 or greater up, and any portion of
a share equal to less than .500 down, in each case to the nearest whole number.
SECTION 4. Eligibility for Participation
Officers and other employees of the Company or a Subsidiary
Corporation, members of the Board, and independent contractors and consultants
who perform services for the Company shall be eligible to participate in the
Plan (hereinafter referred to individually as an "Eligible Participant" and
collectively as "Eligible Participants"). Only Eligible Participants who are
officers or other employees of the Company or a Subsidiary Corporation shall be
eligible to receive Incentive Stock Options. All Eligible Participants shall
be eligible to receive Nonqualified Stock Options. The Committee shall select
from among the Eligible Participants those who will receive Grants (the
"Grantees") and shall determine the number of shares of Common Stock subject to
each Grant; provided, however, that members of the Board who are not employed
in any capacity by the Company (hereinafter referred to as "Non-Employee
Directors") may only receive grants of Stock Options pursuant to Section 5(j).
The Committee may, if it so desires, base any such selections or determinations
upon the recommendations of management of the Company. Nothing contained in
the Plan shall be construed to limit in any manner whatsoever the right of the
Company to grant rights or options to acquire Common Stock or awards of Common
Stock otherwise than pursuant to the Plan.
- 3 -
4
SECTION 5. Stock Options
(a) Number of Shares. The Committee, in its sole discretion,
shall determine the number of shares of Common Stock that will be subject to
each Stock Option.
(b) Type of Stock Option and Exercise Price.
(1) The Committee may grant options qualifying as
incentive stock options within the meaning of Section 422 of the Code
("Incentive Stock Options") and other stock options ("Nonqualified
Stock Options"), in accordance with the terms and conditions set forth
herein, or may grant any combination of Incentive Stock Options and
Nonqualified Stock Options (hereinafter referred to collectively as
"Stock Options"). The exercise price per share of an Incentive Stock
Option shall be the fair market value (as defined herein) of a share
of Common Stock on the date of grant. If the Grantee of an Incentive
Stock Option is the owner (as determined under Section 424(d) of the
Code) of stock possessing more than 10% of the total combined voting
power of all classes of stock of the Company or a Parent Corporation
or Subsidiary Corporation, the exercise price per share in the case of
an Incentive Stock Option shall not be less than 110% of the fair
market value of a share of Common Stock on the date of grant.
(2) For all valuation purposes under the Plan, the fair
market value of a share of Common Stock shall be determined in
accordance with the following provisions:
(A) If the Common Stock is not at the time listed
or admitted to trading on any stock exchange but is traded
either on the over-the-counter market or listed on the Nasdaq
National Market, the fair market value shall be the closing
selling price of one share of Common Stock on the date in
question as such price is reported by the Nasdaq system or any
successor system. If there is no reported closing selling
price for the Common Stock on the date in question, then the
closing selling price on the next preceding date for which
such quotation exists shall be determinative of fair market
value.
(B) If the Common Stock is at the time listed or
admitted to trading on any stock exchange, then the fair
market value shall be the closing selling price of one share
of Common Stock on the date in question on the stock exchange
determined by the Committee to be the primary market for the
Common Stock, as such prices are officially quoted on such
exchange. If there is no reported closing selling price of
Common Stock on such exchange on the date in question, then
the fair market value shall be the closing selling price on
the next preceding date for which such quotation exists.
(C) If the Common Stock is at the time neither
listed nor admitted to trading on any stock exchange nor
traded in the over-the-counter market (or, if the Committee
determines that the value as determined pursuant to Section
5(b)(2)(A) or (B) above does not reflect fair market value),
then the Committee shall determine fair market value after
taking into account such factors as it deems appropriate.
- 4 -
5
(c) Exercise Period. The Committee shall determine the exercise
period of each Stock Option. The exercise period shall not exceed ten years
from the date of grant. However, if the Grantee of an Incentive Stock Option
is the owner (as determined under Section 424(d) of the Code) of stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company or a Parent Corporation or Subsidiary Corporation, the
exercise period shall not exceed five years from the date of grant.
Notwithstanding any determinations by the Committee regarding the exercise
period of any Stock Option, a Change in Control (as defined in Section 7) shall
have the effect set forth in Section 7.
(d) Vesting of Stock Options and Restrictions on Shares. The
vesting period for Stock Options shall commence on the date of grant and shall
end on the date or dates, determined by the Committee, that shall be specified
in the Grant Letter. The Committee may impose upon the shares of Common Stock
issuable upon the exercise of a Stock Option such restrictions as it deems
appropriate and specifies in the Grant Letter. During any period in which such
restrictions apply, the Committee, in such circumstances as it deems equitable,
may determine that all such restrictions shall lapse. Notwithstanding any
other provision of the Plan, all outstanding Stock Options shall become
immediately and fully vested and immediately exercisable upon a Change in
Control of the Company (as defined in Section 7 below).
(e) Manner of Exercise. A Grantee may exercise a Stock Option by
delivering a duly completed notice of exercise to the Corporate Secretary of
the Company, together with payment of the exercise price and any applicable tax
withholdings. Such notice may include instructions authorizing the Company to
deliver the certificates representing the shares of Common Stock issuable upon
the exercise of such Stock Option to any designated registered broker or dealer
("Designated Broker"). Such instructions shall designate the account into
which the shares are to be deposited. The Grantee may tender such notice of
exercise, which has been properly executed by the Grantee, and the
aforementioned delivery instructions to any Designated Broker.
(f) Termination of Eligible Status, Disability or Death.
(1) If a Grantee terminates employment or otherwise
ceases to be an Eligible Participant for any reason (other than, in
the case of an individual, the death of such individual) any Stock
Option which is otherwise exercisable by the Grantee shall terminate
unless exercised within three months after the date on which the
Grantee ceases to be an Eligible Participant (or within such other
period of time, which may be longer or shorter than three months, as
may be specified in the Grant Letter), but in any event no later than
the date of expiration of the exercise period, except that in the case
of an individual Grantee who is disabled within the meaning of Section
22(e)(3) of the Code, such period shall be one year rather than three
months (except as otherwise provided in the Grant Letter).
(2) In the event of the death of an individual Grantee
while he or she is an Eligible Participant or within not more than
three months after the date on which the Grantee ceases to be an
Eligible Participant (or within such other period of time, which may
be longer or shorter than three months, as may be specified in the
Grant Letter), any Stock Option which was otherwise exercisable by the
Grantee at the date of death may be exercised by the Grantee's
personal representative at any time prior to the expiration
- 5 -
6
of one year from the date of death, but in any event no later than the
date of expiration of the exercise period.
(g) Satisfaction of Exercise Price. The Grantee shall pay the
exercise price in cash, or, with the consent of the Committee in its sole
discretion, by delivering (or attesting his or her ownership of) shares of
Common Stock already owned by the Grantee and having a fair market value on the
date of exercise equal to the exercise price, or a combination of cash and
shares of Common Stock; provided however, that if shares of Common Stock are
used to pay the exercise price of a Stock Option, such shares must have been
held by the Grantee for at least six months. The Committee shall determine any
other methods by which the exercise price of a Stock Option may be paid, the
form of payment, including, without limitation, "cashless exercise"
arrangements, and the methods by which shares of Common Stock shall be
delivered or deemed to be delivered to Grantees. Without limiting the power
and discretion conferred on the Committee pursuant to the preceding sentence,
the Committee may, in the exercise of its discretion, but need not, allow a
Grantee to pay the exercise price of a Stock Option by directing the Company to
withhold from the shares of Common Stock that would otherwise be issued upon
exercise of the Stock Option that number of shares having a fair market value
on the exercise date equal to the exercise price, all as determined pursuant to
rules and procedures established by the Committee. The Grantee shall pay the
exercise price and the amount of withholding tax due, if any, at the time of
exercise. Shares of Common Stock shall not be issued or transferred upon any
purported exercise of a Stock Option until the exercise price and the
withholding obligation are fully paid.
(h) Limits on Incentive Stock Options. Each Grant of an Incentive
Stock Option shall provide that:
(1) the Stock Option is not transferable by the Grantee,
except, in the case of an individual Grantee, by will or the laws of
descent and distribution;
(2) the Stock Option is exercisable only by the Grantee,
except as otherwise provided herein or in the Grant Letter in the
event of the death of an individual Grantee; and
(3) the aggregate fair market value of the Common Stock
on the date of the Grant with respect to which Incentive Stock Options
are exercisable for the first time by a Grantee during any calendar
year under the Plan and under any other stock option plan of the
Company shall not exceed $100,000.
(i) Replacement Stock Options. If a Stock Option granted pursuant
to the Plan may be exercised by a Grantee by means of a stock-for-stock swap
method of exercise as provided in Section 5(g) above, then the Committee may,
in its sole discretion and at the time of the original Grant, authorize the
Grantee to automatically receive a replacement Stock Option pursuant to this
Section of the Plan. This replacement Stock Option shall cover a number of
shares of Common Stock determined by the Committee, but in no event more than
the number of shares equal to the difference between the number of shares of
the original Stock Option exercised and the net shares received by the Grantee
from such exercise. The per share exercise price of the replacement Stock
Option shall equal the then current fair market value of a share of Common
Stock, and shall have a term extending to the expiration date of the original
Stock Option. The Committee shall have the right, in its sole discretion and
at any time, to discontinue the
- 6 -
7
automatic grant of replacement Stock Options if it determines the continuance
of such Grants to no longer be in the best interest of the Company.
(j) Stock Option Grants to Non-Employee Directors. Each
Non-Employee Director will receive a grant of a Nonqualified Stock Option to
purchase 20,000 shares of Common Stock upon the date he or she first becomes a
member of the Board, and thereafter will receive a grant of a Nonqualified
Stock Option to purchase 7,500 shares of Common Stock (subject to adjustment as
provided in this Plan) as of the date of the Company's Annual Meeting of
Stockholders each year.
(1) Option Exercise Price. Stock Options granted under
this Section 5(j) shall have a per share exercise price equal to the
fair market value of a share of Common Stock on the date of grant, and
such Stock Option shall become exercisable, with respect to 33% of the
shares of Common Stock underlying the option, on each anniversary
following the date of grant.
(2) Administration. The provisions of this Section 5(j)
are intended to operate automatically and not require administration.
However, to the extent that administrative determinations are
required, the provisions of this Section 5(j) shall be made by the
members of the Board who are not eligible to receive Grants under this
Section 5(j), but in no event shall such determinations affect the
eligibility of Grantees, the determination of the exercise price, the
timing of the Grants or the number of shares subject to Stock Options
hereunder.
(3) Applicability of Plan Provisions. Except as
otherwise provided in this Section 5(j), the Nonqualified Stock
Options to Non-Employee Directors shall be subject to the provisions
of this Plan applicable to Nonqualified Stock Options to other
persons.
SECTION 6. Transferability of Stock Options
No Stock Option shall be assignable or transferable by a Grantee other
than by will or the laws of descent and distribution or, except in the case of
an Incentive Stock Option, pursuant to a domestic relations order that would
satisfy Section 414(p)(1)(A) of the Code if such section applied to a Stock
Option issued under the Plan; provided, however, that the Committee may (but
need not) permit other transfers where the Committee concludes that such
transferability (i) does not result in accelerated taxation, (ii) does not
cause any Stock Option intended to be an Incentive Stock Option to fail to be
described in Code Section 422(b), and (iii) is otherwise appropriate and
desirable, taking into account any state or federal tax or securities laws
applicable to transferable stock options.
Only a Grantee or his or her permitted transferee (or, in the case of
an individual Grantee, his or her authorized legal representative) may exercise
rights under a Grant. Upon the death of an individual Grantee, the personal
representative or other person entitled to succeed to the rights of the Grantee
("Successor Grantee") may exercise such rights. A Successor Grantee shall
furnish proof satisfactory to the Company of such person's right to receive the
Grant under the Grantee's will or under the applicable laws of descent and
distribution.
SECTION 7. Change of Control
- 7 -
8
For purposes of the Plan, "Change in Control" means and includes each
of the following:
(1) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 25% or more of the
combined voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however, that for
purposes of this subsection (1), the following acquisitions shall not
constitute a Change of Control: (i) any acquisition by a Person who is
on April 1, 1997 the beneficial owner of 25% or more of the
Outstanding Company Voting Securities, (ii) any acquisition directly
from the Company, (iii) any acquisition by the Company, (iv) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company, or (v) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
subsection (3) of this definition; or
(2) Individuals who, as of April 1, 1997, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, that any individual
becoming a director subsequent to April 1, 1997 whose election, or
nomination for election by the Company's stockholders, was approved by
a vote of at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(3) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a "Business Combination"), in each case,
unless, following such Business Combination, (i) all or substantially
all of the individuals and entities who were the beneficial owners of
the Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 60% of the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors of
the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Voting
Securities, and (ii) no Person (excluding any corporation resulting
from such Business Combination or any employee benefit plan (or
related trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 25%
or more of the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination, and (iii) at
least a majority of the members of the board of directors of the
corporation resulting from such Business Combination were members of
the Incumbent Board at the time of the execution of the initial
agreement, or of the action of the Board, providing for such Business
Combination; or
- 8 -
9
(4) Approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
If a Change in Control occurs, then each Stock Option shall become
immediately and fully vested and immediately exercisable. Before or after the
occurrence of an anticipated Change in Control, the Committee, in its
discretion, may provide that outstanding Stock Options may be canceled
unilaterally by the Company in exchange for an amount equal to (x) the same
consideration each Employee and Non-Employee Director otherwise would receive
with respect to Common Stock subject to the Stock Option if such Common Stock
has been sold, surrendered, exchanged or otherwise in the transaction
constituting the Change in Control, less (y) the aggregate exercise price with
respect to the Common Stock subject to such Stock Option.
SECTION 8. Stockholder Approval; Effective Date
The Plan was approved by the stockholders of the Company on May 19,
1994, and became effective on June 1, 1994. Pursuant to Section 9, the Plan
was amended and restated by the Board of Directors of the Company on April 16,
1997, effective as of such date.
SECTION 9. Amendment and Termination of the Plan
(a) Amendment. The Board or the Committee may, at any time and
from time to time, amend, modify or terminate the Plan without stockholder
approval; provided, however, that the Board or Committee may condition any
amendment or modification on the approval of stockholders of the Company if
such approval is necessary or deemed advisable with respect to tax, securities
or other applicable laws, policies or regulations.
(b) Termination of Plan. The Plan shall terminate on June 1, 2004
unless earlier terminated by the Board or unless extended by the Board with the
approval of the stockholders.
(c) Termination and Amendment of Outstanding Grants. A
termination or amendment of the Plan that occurs after a Grant is made shall
not result in the termination or amendment of the Grant unless the Grantee
consents or unless the Committee acts under Section 16(b) below. The
termination of the Plan shall not impair the power and authority of the
Committee with respect to an outstanding Grant. Whether or not the Plan has
terminated, an outstanding Grant may be terminated or amended under Section
16(b) below or may be amended by agreement of the Company and the Grantee which
is consistent with the Plan.
SECTION 10. Funding of the Plan
The Plan shall be unfunded and shall not create (or be construed to
create) a trust or separate fund or funds. The Plan shall not establish any
fiduciary relationship between the Company and any participant or beneficiary
of a participant. To the extent any person holds any obligation of the Company
by virtue of an award granted under the Plan, such obligation shall merely
constitute a general unsecured liability of the Company and accordingly shall
not confer upon such person any right, title or interest in any assets of the
Company.
SECTION 11. Rights of Eligible Participation
- 9 -
10
Nothing in the Plan shall entitle any Eligible Participant or other
person to any claim or right to any Grant under the Plan. Neither the Plan nor
any action taken hereunder shall be construed as giving any Eligible
Participant or Grantee any rights to be retained by the Company in any
capacity, whether as an employee, non-employee member of the Board, independent
contractor, consultant or otherwise.
SECTION 12. Withholding of Taxes
The Company shall have the right to require the Grantee to pay to the
Company the amount of any taxes which the Company is required to withhold in
respect of such Grants or to take whatever action it deems necessary to protect
the interests of the Company in respect of such tax liabilities, including,
without limitation, withholding a portion of the shares of Common Stock
otherwise deliverable pursuant to the Plan. The Company's obligation to issue
or transfer shares of Common Stock upon the exercise of a Stock Option shall be
conditioned upon the Grantee's compliance with the requirements of this Section
to the satisfaction of the Committee.
SECTION 13. Agreements with Grantees
Each Grant made under the Plan shall be evidenced by a Grant Letter
containing such terms and conditions as the Committee shall approve.
SECTION 14. Requirements for Issuance of Shares
No Common Stock shall be issued or transferred under the Plan unless
and until all applicable legal requirements have been complied with to the
satisfaction of the Committee. The Committee shall have the right to condition
any Stock Option on the Grantee's undertaking in writing to comply with such
restrictions on any subsequent disposition of the shares of Common Stock issued
or transferred thereunder as the Committee shall deem necessary or advisable as
a result of any applicable law, regulation or official interpretation thereof,
and certificates representing such shares may be legended to reflect any such
restrictions.
SECTION 15. Headings
The section headings of the Plan are for reference only. In the event
of a conflict between a section heading and the content of a section of the
Plan, the content of the section shall control.
SECTION 16. Miscellaneous
(a) Substitute Grants. The Committee may make a Grant to an
employee, a non-employee director, or an independent contractor or consultant
of another corporation, if such person shall become an Eligible Participant by
reason of a corporate merger, consolidation, acquisition of stock or property,
reorganization or liquidation involving the Company or a Subsidiary Corporation
and such other corporation. Any such Grant shall be made in substitution for a
stock option granted by the other corporation ("Substituted Stock Incentives"),
but the terms and conditions of the substitute Grant may vary from the terms
and conditions required by the Plan and from those of the Substituted Stock
Incentives. The Committee shall prescribe the provisions of the substitute
Grants.
- 10 -
11
(b) Compliance with Law. The Plan, the exercise of Grants and the
obligations of the Company to issue or transfer shares of Common Stock under
Grants shall be subject to all applicable laws and required approvals by any
governmental or regulatory agencies. The Committee may revoke any Grant if it
is contrary to law or modify any Grant to bring it into compliance with any
valid and mandatory government regulations. The Committee may also adopt rules
regarding the withholding of taxes on payments to Grantees. The Committee may,
in its sole discretion, agree to limit its authority under this Section.
(c) Ownership of Stock. A Grantee, transferee or Successor
Grantee shall have no rights as a stockholder with respect to any shares of
Common Stock covered by a Grant until the shares are issued or transferred to
the Grantee, transferee or Successor Grantee on the stock transfer records of
the Company.
- 11 -