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Exhibit 10.5
STOCK OPTION PLAN
Jet Aviation Trading, Inc., a Florida corporation (the "Company") sets
forth herein the terms of this Stock Option Plan (the "Plan") as follows:
1. PURPOSE
The Plan is intended to advance the interests of the Company by
providing eligible individuals (as designated pursuant to Section 4 below) with
an opportunity to acquire or increase a proprietary interest in the Company,
which will thereby create a stronger incentive to expend maximum effort for the
growth and success of the Company and its subsidiaries, and will encourage such
eligible individuals to remain in the employ or service of the Company or that
of one or more of its subsidiaries. Each stock option granted under the Plan
(an "Option") is intended to be an "incentive stock option" ("Incentive Stock
Option") within the meaning of Section 422 of the Internal Revenue Code of
1986, or the corresponding provision of any subsequently-enacted tax statute,
as amended from time to time (the "Code"), except (i) to the extent that any
such Option would exceed the limitations set forth in Section 7 below; (ii) for
Options specifically designated at the time of grant as not being "incentive
stock options"; and (iii) for Options granted to consultants or to members of
the board of directors of the Company who are not officers or other employees
of the Company or any "subsidiary corporation" (a "Subsidiary") thereof within
the meaning of Section 424(f) of the Code or to directors of any Subsidiary who
are not officers or other salaried employees of the Company (a "Subsidiary
Director"). If any Options granted hereunder shall, for any reason, fail to
qualify as an Incentive Stock Option, they shall nevertheless be deemed options
issued by the Company pursuant to the Plan and for tax purposes shall be
"non-qualified stock options."
2. ADMINISTRATION
(a) Board. The Plan shall be administered by the
Board of Directors of the Company (the "Board"), which shall have the full
power and authority to take all actions, and to make all determinations
required or provided for under the Plan or any Option or Option Agreement (as
defined in Section 8 below) entered into hereunder and all such other actions
and determinations not inconsistent with the specific terms and provisions of
the Plan deemed by the Board to be necessary or appropriate to the
administration of the Plan or any Option granted or Option Agreement entered
into hereunder. All such actions and determinations shall be by the affirmative
vote of a majority of the members of the Board present at a meeting at which
any issue relating to the Plan is properly raised for consideration or without
a meeting by written consent of the Board executed in accordance with the
Company's Articles of Incorporation and By-Laws, and with applicable law. The
interpretation and construction by the Board of any provision of the Plan or of
any Option granted or Option Agreement entered into hereunder shall be final
and conclusive.
(b) Committee. The Board may appoint a Stock Option
Committee (the "Committee"), which may be the compensation committee,
consisting of not less than two members of the Board, none of whom shall be an
officer or other salaried employee of the Company or any of its subsidiaries,
and each of whom shall qualify in all respects as a "non-employee director" as
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defined in Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") and as an "outside director" under Section
162(m)(4)(C)(i) of the Code. The Committee shall be solely responsible for
those actions and responsibilities which are required to be taken by outside
directors to qualify for the exceptions under Code ss.162(m) and the
regulations thereunder for performance-based compensation. The Board, in its
sole discretion, may provide that the role of the Committee shall be otherwise
limited to making recommendations to the Board concerning any determinations to
be made and actions to be taken by the Board pursuant to or with respect to the
Plan, or the Board may delegate to the Committee such powers and authorities
related to the administration of the Plan, as set forth in Section 2(a) above,
as the Board shall determine, consistent with the Articles of Incorporation and
By-Laws of the Company and applicable law. The Board may remove members, add
members, and fill vacancies on the Committee from time to time, all in
accordance with the Company's Articles of Incorporation and By-Laws, and with
applicable law. The majority vote of the Committee, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be the
valid acts of the Committee.
(c) No Liability. No member of the Board or of the
Committee shall be liable for any action or determination made in good faith
with respect to the Plan or any Option granted or Option Agreement entered into
hereunder, and the Company shall indemnify and hold harmless any member of the
Board or Committee from any and all damages, losses or claims, including
reasonable attorneys fees, arising from their actions (or inactions) in
connection with this Plan or its administration.
(d) Delegation to the Committee. In the event that
the Plan or any Option granted or Option Agreement entered into hereunder
provides for any action to be taken by or determination to be made by the
Board, such action may be taken by or such determination may be made by the
Committee if the power and authority to do so has been delegated to the
Committee by the Board as provided for in Section 2(b) above. Unless otherwise
expressly determined by the Board, any such action or determination by the
Committee shall be final and conclusive.
(e) Action by the Board. The Board may act under the
Plan with respect to any Option granted to or Option Agreement entered into
with an officer, director or stockholder of the Company who is subject to
Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") other than by, or in accordance with the recommendations of, the
Committee, constituted as set forth in Section 2(b) above, only if the Plan is
otherwise administered in accordance with the provisions of Rule 16b-3 and if
the provision of Code ss.162(m) are not applicable to such recommendations.
3. STOCK
The stock that may be issued pursuant to Options granted under the
Plan shall be shares of common stock, par value $.001 per share, of the Company
(the "Stock"), which shares may be treasury shares or authorized but unissued
shares. The number of shares of Stock that may be issued pursuant to Options
and Stock Appreciation Rights granted under the Plan shall not exceed in the
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aggregate 750,000 shares. The foregoing numbers of shares are subject to
adjustment as provided in Section 18 below. If any Option expires, terminates,
or is terminated or canceled for any reason prior to exercise in full, the
shares of Stock that were subject to the unexercised portion of such Option
shall be available for future Options granted under the Plan and such number of
shares shall be restored to the number of shares available for issuance under
Options granted.
4. ELIGIBILITY
(a) Employees and Subsidiary Directors. Options may
be granted under the Plan to any employee or consultant of the Company or any
Subsidiary (including any such employee who is an officer or director of the
Company or any Subsidiary) or to any Subsidiary Director as the Board or
Committee shall determine and designate from time to time prior to the
expiration or termination of the Plan.
(b) Outside Directors. On the day of each annual
meeting of the Stockholders of the Company, each director who is not then an
employee of the Company or any of its subsidiaries (an "Outside Director"),
shall be granted an Option to purchase 5000 shares of Stock, in each case at
the price and upon the other terms and conditions specified in the Plan. In
addition, subject to the availability of shares of Stock under the Plan, each
person first elected to the Board as an Outside Director after the effective
date of the Plan, shall be granted, as of the date such individual takes
office, an Option to purchase 10000 shares of Stock at the price and upon the
terms and conditions specified in the Plan. Each Option granted to an Outside
Director shall be granted at an Option Price equal to 100 percent of the fair
market value of a share of Stock on the date of grant (determined under Section
9 below) and upon the other terms and conditions specified in the Plan. Except
as provided in this Section 4(b), no Outside Director shall be eligible to be
granted Options under this Plan.
(c) Multiple Grants. An individual may hold more
than one Option subject to such restrictions as are provided herein.
5. EFFECTIVE DATE AND TERMS OF THE PLAN
(a) Effective Date. The Plan shall be effective and
considered adopted as of September 1, 1997, subject to approval of the Plan
within one year of such effective date by a majority of the votes present and
entitled to vote at a duly held meeting of the stockholders of the Company at
which a quorum representing a majority of all outstanding voting stock is
present, either in person or by proxy; provided, however, that upon approval of
the Plan by stockholders of the Company as set forth above, all Options granted
under the Plan on or after the effective date shall be fully effective as if
the stockholders of the Company had approved the Plan on the effective date. If
the stockholders fail to approve the Plan within one year of such effective
date, any Options granted hereunder shall be null and void and of no effect.
(b) Term. The Plan shall terminate on August 31,
2007.
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6. GRANT OF OPTIONS
Subject to the terms and conditions of the Plan, the Board or Committee
may, at any time and from time to time, prior to the date of termination of the
Plan, grant to such eligible individuals as the Board or Committee may determine
("Optionees"), Options to purchase such number of shares of the Stock on such
terms and conditions as the Board or Committee may determine, including any
terms or conditions which may be necessary to qualify such Option as "incentive
stock options" under Section 422 of the Code. The date on which the Board or
Committee approves the grant of an Option (or such later date as is specified by
the Board or Committee) shall be considered the date on which such Option is
granted.
7. LIMITATION ON INCENTIVE STOCK OPTIONS
An Option (other than an Option described in exception (ii) or (iii)
of Section 1) shall constitute an Incentive Stock Option to the extent that the
aggregate fair market value of Stock (determined at the time the Option is
granted) with respect to which Incentive Stock Options are exercisable for the
first time by any Optionee during any calendar year (under the Plan and all
other plans of the Optionee's employer corporation and its parent and
subsidiary corporations within the meaning of Section 422(d) of the Code) does
not exceed $100,000. This limitation shall be applied by taking Options into
account in the order in which they were granted.
8. OPTION AGREEMENTS
All Options granted pursuant to the Plan shall be evidenced by written
agreements ("Option Agreements"), to be executed by the Company and by the
Optionee, in such form or forms and containing such provisions as the Board or
Committee shall from time to time determine. Option Agreements covering Options
granted from time to time or at the same time need not contain similar
provisions; provided, however, that all such Option Agreements shall comply
with all terms of the Plan.
9. OPTION PRICE
The purchase price of each share of the Stock subject to an Option
(the "Option Price") shall be fixed by the Board or Committee and stated in
each Option Agreement, and shall be not less than 100 percent (or, in the case
of an Option which does not or is not intended to qualify as an incentive stock
option, not less than 50 percent) of the fair market value of a share of Stock
on the date the Option is granted (as determined in good faith by the Board or
Committee); provided, however, that in the event the Optionee would otherwise
be ineligible to receive an Incentive Stock Option by reason of the provisions
of Sections 422(b)(6) and 424(d) of the Code (relating to stock ownership of
more than ten percent), the Option Price of an Option that is intended to be an
Incentive Stock Option shall be not less than 110 percent of the fair market
value of a share of Stock at the time such Option is granted. In the event that
the Stock is listed on an established national or regional stock exchange, is
admitted to quotation on the Nasdaq National Market System, or is publicly
traded on
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an established securities market, in determining the fair market value of the
Stock, the Board or Committee shall use the closing price of the Stock on such
exchange or System or in such market (the highest such closing price if there
is more than one such exchange or market) on the trading date the Option is
granted (or, if there is no such closing price, then the Board or Committee
shall use the mean between the high and low prices on such date or if
unavailable the mean between the high and low bid prices on such date), or, if
no sale (or bid) of the Stock had been made on such day, on the next preceding
day on which any such sale (or bid) shall have been made.
10. TERM AND EXERCISE OF OPTION
(a) Term. Each Option granted under the Plan shall
terminate and all rights to purchase shares thereunder shall cease upon the
expiration of ten years from the date such Option is granted, or, with respect
to Options granted to persons other than Outside Directors, on such date prior
thereto as may be fixed by the Board or Committee and stated in the Option
Agreement relating to such Option; provided, however, that in the event the
Optionee would otherwise be ineligible to receive an Incentive Stock Option by
reason of the provisions of Sections 422(b)(6) and 424(d) of the Code (relating
to stock ownership of more than ten percent), an Option granted to such
Optionee that is intended to be an Incentive Stock Option, shall in no event be
exercisable after the expiration of five years from the date it is granted.
(b) Option Period and Limitations on Exercise. Each
Option granted to persons other than Outside Directors under the Plan shall be
exercisable, in whole or in part, at any time and from time to time, over a
period commencing on or after the date of grant and ending upon the expiration
or termination of the Option, as the Board or Committee shall determine and as
set forth in the Option Agreement relating to such Option. Without limiting the
foregoing, the Board or Committee, subject to the terms and conditions of the
Plan, may in its sole discretion provide that an Option may not be exercised in
whole or in part for any period or periods of time during which such Option is
outstanding; provided, however, that any such limitation on the exercise of an
Option contained in any Option Agreement may be rescinded, modified or waived
by the Board or Committee, in its sole discretion, at any time and from time to
time after the date of such Option, so as to accelerate that time at which the
Option may be exercised. Subject to Section 10(a), each Option granted to
Outside Directors shall be exercisable, in whole or in part, at any time and
from time to time, over a period commencing on the date of grant and ending
upon the expiration of the Option as set forth in the Option Agreement.
Notwithstanding any other provision of the Plan, no Option granted to an
Optionee under the Plan shall be exercisable in whole or in part prior to the
date the Plan is approved by the stockholders of the Company as provided in
Section 5 above.
(c) Method of Exercise. An Option that is
exercisable hereunder may be exercised by delivery to the Company on any
business day, at its principal office, addressed to the attention of the
Committee (or Board if no Committee), of written notice of exercise, which
notice shall specify the number of shares with respect to which the Option is
being exercised. The minimum number of shares of Stock with respect to which an
Option may be exercised, in whole or in part, at any time, shall be the lesser
of 100 shares or the maximum number of shares available
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for purchase under the Option at the time of exercise. Except as provided in
the next following sentence, payment in full of the Option Price of the shares
for which the Option is being exercised shall accompany the written notice of
exercise of the Option and shall be made either (i) in cash or in cash
equivalents; (ii) through the tender to the Company of shares of Stock,
including the shares of Stock subject to the Option being exercised, which
shares shall be valued, for purposes of determining the extent to which the
Option Price has been paid thereby, at their fair market value (determined in
the manner described in Section 9 above) on the date of exercise; or (iii) by a
combination of the methods described in (i) and (ii); provided, however, that
the Board or Committee may in its discretion impose and set forth in the Option
Agreement pertaining to an Option granted to persons other than Outside
Directors such limitations or prohibitions on the use of shares of Stock to
exercise Options as it deems appropriate. Unless the Board or Committee shall
provide otherwise, in the case of an Option Agreement relating to an Option
granted to someone other than an Outside Director, payment in full of the
Option Price need not accompany the written notice of exercise provided the
notice of exercise directs that the Stock certificate or certificates for the
shares for which the Option is exercised be delivered to a licensed broker
acceptable to the Company as the agent for the individual exercising the Option
and, at the time such Stock certificate or certificates are delivered, the
broker tenders to the Company cash (or cash equivalents acceptable to the
Company) equal to the Option Price for the shares of Stock purchased pursuant
to the exercise of the Option plus the amount (if any) of federal and other
taxes which the Company may, in its judgment, be required to withhold with
respect to the exercise of the Option. An attempt to exercise any Option
granted hereunder other than as set forth above shall be invalid and of no
force and effect. Promptly after the exercise of an Option and the payment in
full of the Option Price of the shares of Stock covered thereby, the individual
exercising the Option shall be entitled to the issuance of a Stock certificate
or certificates evidencing his ownership of such shares. A separate Stock
certificate or certificates shall be issued for any shares purchased pursuant
to the exercise of an Option which is an Incentive Stock Option which
certificate or certificates shall not include any shares which were purchased
pursuant to the exercise of an Option which is not an Incentive Stock Option.
An individual holding or exercising an Option shall have none of the rights of
a stockholder until the shares of Stock covered thereby are fully paid and
issued to him and, except as provided in Section 18 below, no adjustments shall
be made for dividends or other rights for which the record date is prior to the
date of such issuance.
11. TRANSFERABILITY OF OPTIONS
Unless set forth in the Option Agreement or Stock Appreciation Right
Agreement at the time of grant, or at any time thereafter, no Option or Stock
Appreciation Right shall be assignable or transferable by the Optionee to whom
it is granted, other than by will or the laws of descent and distribution and
during the lifetime of an Optionee to whom an Option is granted, only such
Optionee (or, in the event of legal incompetency, the Optionee's guardian or
legal representative) may exercise the Option.
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12. STOCK APPRECIATION RIGHTS
The Board may, upon recommendation of the Committee, grant
Stock Appreciation Rights to Optionees at the same time as such Optionees are
awarded Options under the Plan. Such Stock Appreciation Rights shall be
evidenced by agreements in such form as the Board shall from time to time
approve. Such agreements shall comply with, and be subject to, the following
terms and conditions:
(a) Employment Agreement. The Board may, in its discretion,
include in any Stock Appreciation Rights granted under the Plan a condition
that the Optionee shall agree to remain in the employ of, and to render
services to, the Company or any of its Subsidiaries for a period of time
(specified in the agreement) from the date the Stock Appreciation Rights are
granted. No such agreement shall impose upon the Company or any of its
Subsidiaries, however, any obligation to employ the Optionee for any period of
time.
(b) Grant. Each Stock Appreciation Right shall relate to a
specific Option under the Plan, and shall be awarded to an Optionee
concurrently with the grant of such Option. The number of Stock Appreciation
Rights granted to an Optionee shall be equal to the number of shares that the
Optionee is entitled to receive pursuant to the related Option. The number of
Stock Appreciation Rights held by an Optionee shall be reduced by:
(i) the number of Stock Appreciation Rights
exercised for Stock or cash under the Stock Appreciation Rights agreement, and
(ii) the number of shares of Stock purchased by such
Optionee pursuant to the related Option.
(c) Manner of Exercise. An Optionee shall exercise Stock
Appreciation Rights by giving written notice of such exercise to the Company.
The date upon which such written notice is received by the Company shall be the
exercise date for the Stock Appreciation Rights. The Stock Appreciation Rights
may only be exercised when the fair market value of the Stock subject to an
Option exceeds the exercised price of the Option.
(d) Appreciation Available. Each Stock Appreciation Right
shall entitle an Optionee to the following amount of appreciation and no more -
the excess of the fair market value of a share of Stock on the exercise date
over the option price of the related Option. The total appreciation available
to an Optionee from any exercise of Stock Appreciation Rights shall be equal to
the number of Stock Appreciation Rights being exercised, multiplied by the
amount of appreciation per Stock Appreciation Right determined under the
preceding sentence.
(e) Payment of Appreciation. In the discretion of the
Optionee, the total appreciation available to an Optionee from an exercise of
Stock Appreciation Rights may be paid to the Optionee
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either in Stock or in cash. If paid in cash, the amount thereof shall be the
amount of appreciation determined under Paragraph (d), above. If paid in Stock,
the number of shares of Stock that shall be issued pursuant to the exercise of
Stock Appreciation Rights shall be determined by dividing the amount of
appreciation determined under Paragraph (d), above, by the fair market value of
a share of Stock on the exercise date of the Stock Appreciation Rights.
(f) Limitations Upon Exercise of Stock Appreciation Rights. An
Optionee may exercise a Stock Appreciation Right for cash only in conjunction
with the exercise of the Option to which the Stock Appreciation Right relates.
Stock Appreciation Rights may be exercised only at such times and by such
persons as may exercise Options under the Plan. Stock Appreciation Rights shall
expire when the Option to which the Stock Appreciation Rights expires.
Adjustment to the number of shares in the Plan and the price per share pursuant
to Section 18 below shall also be made to any Stock Appreciation Rights held by
each Optionee. Any termination, amendment, or revision of the Plan pursuant to
Section 17 below shall be deemed a termination, amendment, or revision of Stock
Appreciation Rights to the same extent. A Stock Appreciation Right is
transferable only when the underlying Option is transferable, and under the
same conditions.
13. TERMINATION OF SERVICE OR EMPLOYMENT
(a) Employees and Subsidiary Directors. Upon the
termination of the employment or service of an Optionee (other than an Outside
Director) with the Company or a Subsidiary, other than by reason of the death
or "permanent and total disability" (within the meaning of Section 22(e)(3) of
the Code) of such Optionee, any Option and Stock Appreciation Rights granted to
an Optionee pursuant to the Plan shall terminate three months after the date of
such termination of employment, unless earlier terminated pursuant to Section
10(a); provided, however, that the Board or Committee may provide, by inclusion
of appropriate language in any Option Agreement, (which is not an Incentive
Stock Option) or Stock Appreciation Rights Agreement that the Optionee may
(subject to the general limitations on exercise set forth in Section 10(b)
above), in the event of termination of service or employment of the Optionee
with the Company or a Subsidiary, exercise an Option or Stock Appreciation
Right, in whole or in part, at any time subsequent to such termination of
service or employment and prior to termination of the Option or Stock
Appreciation Right pursuant to Section 10(a) above, either subject to or
without regard to any installment limitation on exercise imposed pursuant to
Section 10(b) above. Whether a leave of absence or leave on military or
government service shall constitute a termination of service or employment for
purposes of the Plan shall be determined by the Board or Committee, which
determination shall be final and conclusive. For purposes of the Plan, a
termination of employment with the Company or a Subsidiary shall not be deemed
to occur if the Optionee is immediately thereafter employed with or in the
service of the Company or any Subsidiary.
(b) Outside Directors. Except as provided in Section
13(c), any Option and Stock Appreciation Right granted to an Outside Director
shall terminate upon the expiration of three months after the termination of
the Outside Director's service with the Company other than
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because of death or "permanent and total disability" as defined above, or, if
earlier, upon the expiration of ten years after grant of the Option.
14. RIGHTS IN THE EVENT OF DEATH OR DISABILITY
(a) Death of an Employee or Subsidiary Director. If
an Optionee (other than an Outside Director) dies while in the employ or
service of the Company or a Subsidiary or within the period following the
termination of employment or service during which the Option and Stock
Appreciation Right is exercisable under Section 13 above or 14(b) below, the
executors or administrators or legatees or distributees of such Optionee's
estate shall have the right (subject to the general limitations on exercise set
forth in Section 10(b) above), at any time within one year after the date of
such Optionee's death and prior to termination of the Option and Stock
Appreciation Right pursuant to Section 10(a) above, to exercise any Option or
Stock Appreciation Right held by such Optionee at the date of such Optionee's
death, whether or not such Option or Stock Appreciation Right was exercisable
immediately prior to such Optionee's death; provided, however, that the Board
or Committee may provide by inclusion of appropriate language in any Option
Agreement or Stock Appreciation Rights Agreement that, in the event of the
death of the Optionee, the executors or administrators or legatees or
distributees of such Optionee's estate may exercise an Option or Stock
Appreciation Right (subject to the general limitations on exercise set forth in
Section 10(b) above), in whole or in part, at any time subsequent to such
Optionee's death and prior to termination of the Option or Stock Appreciation
Right pursuant to Section 10(a) above, either subject to or without regard to
any installment limitation on exercise imposed pursuant to Section 10(b) above.
(b) Disability of an Employee or Subsidiary
Director. If an Optionee (other than an Outside Director) terminates employment
or service with the Company or a Subsidiary by reason of the "permanent and
total disability" (within the meaning of Section 22(e)(3) of the Code) of such
Optionee, then such Optionee shall have the right (subject to the general
limitations on exercise set forth in Section 10(b) above), at any time within
one year after such termination of service or employment and prior to
termination of the Option and Stock Appreciation Right pursuant to Section
10(a) above, to exercise, in whole or in part, any Option and Stock
Appreciation Rights held by such Optionee at the date of such termination of
service or employment, whether or not such Option was exercisable immediately
prior to such termination of service or employment; provided, however, that the
Board or Committee may provide, by inclusion of appropriate language in any
Option Agreement, and Stock Appreciation Rights Agreement that the Optionee
may, in the event of the termination of service or employment of the Optionee
with the Company or a Subsidiary by reason of the "permanent and total
disability" (within the meaning of Section 22(e)(3) of the Code) of such
Optionee, exercise an Option, and Stock Appreciation Right in whole or in part,
at any time subsequent to such termination of service or employment and prior
to termination of the Option and Stock Appreciation Right pursuant to Section
10(a) above, either subject to or without regard to any installment limitation
on exercise imposed pursuant to Section 10(b) above. Whether a termination of
service or employment is to be considered by reason of "permanent and total
disability" for
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purposes of this Plan shall be determined by the Board or Committee, which
determination shall be final and conclusive.
(c) Death or Disability of an Outside Director. Any
Option and Stock Appreciation Right granted to an Outside Director shall remain
exercisable for its remaining term in the event the Outside Director's
termination of service is by reason of death or "permanent and total
disability," as defined above, or, in the event of the Outside Director's death
during the three-month period following the Outside Director's termination of
service by reason other than death or permanent and total disability during
which the Option was exercisable pursuant to Section 13(b) above.
15. USE OF PROCEEDS
The proceeds received by the Company from the sale of Stock pursuant
to Options and Stock Appreciation Rights granted under the Plan shall
constitute general funds of the Company.
16. REQUIREMENTS OF LAW
(a) Violations of Law. The Company shall not be
required to sell or issue any shares of Stock under any Option or Stock
Appreciation Right if the sale or issuance of such shares would constitute a
violation by the individual exercising the Option or Stock Appreciation Right
or the Company of any provisions of any law or regulation of any governmental
authority, including without limitation any federal or state securities laws or
regulations. Specifically in connection with the Securities Act of 1933 (as now
in effect or as hereafter amended), upon exercise of any Option or Stock
Appreciation Right unless a registration statement under such Act is in effect
with respect to the shares of Stock covered by such Option or Stock
Appreciation Right the Company shall not be required to sell or issue such
shares unless the Board or Committee has received evidence satisfactory to it
that the holder of such Option or Stock Appreciation Right may acquire such
shares pursuant to an exemption from registration under such Act. Any
determination in this connection by the Board or Committee shall be final,
binding, and conclusive. The Company may, but shall in no event be obligated
to, register any securities covered hereby pursuant to the Securities Act of
1933 (as now in effect or as hereafter amended). The Company shall not be
obligated to take any affirmative action in order to cause the exercise of an
Option or Stock Appreciation Right or the issuance of shares pursuant thereto
to comply with any law or regulation of any governmental authority. As to any
jurisdiction that expressly imposes the requirement that an Option shall not be
exercisable unless and until the shares of Stock covered by such Option or
Stock Appreciation Right are registered or are subject to an available
exemption from registration, the exercise of such Option or Stock Appreciation
Right (under circumstances in which the laws of such jurisdiction apply) shall
be deemed conditioned upon the effectiveness of such registration or the
availability of such an exemption.
(b) Compliance with Rule 16b-3. The intent of this
Plan is to qualify for the exemption provided by Rule 16b-3 promulgated under
the Exchange Act. To the extent any
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provision of the Plan does not comply with the requirements of Rule 16b-3, it
shall be deemed inoperative to the extent permitted by law and deemed advisable
by the Board or Committee and shall not affect the validity of the Plan. In the
event Rule 16b-3 is revised or replaced, the Board, or the Committee acting on
behalf of the Board, may exercise discretion to modify this Plan in any respect
necessary to satisfy the requirements of the revised exemption or its
replacement.
17. AMENDMENT AND TERMINATION OF THE PLAN
The Board or Committee may, at any time and from time to time, amend,
suspend or terminate the Plan as to any shares of Stock as to which Options or
Stock Appreciation Rights have not been granted; provided, however, that no
amendment by the Board or Committee shall, without approval by a majority of
the votes present and entitled to vote at a duly held meeting of the
stockholders of the Company at which a quorum representing a majority of all
outstanding voting stock is, either in person or by proxy, present and voting
on the amendment, or by written consent, in accordance with applicable state
law and the Certificate of Incorporation and By-Laws of the Company, materially
increase the benefits accruing to participants under the Plan, change the
requirements as to eligibility to receive Options and Stock Appreciation Rights
or increase the maximum number of shares of Stock in the aggregate that may be
sold pursuant to Options or Stock Appreciation Rights granted under the Plan
(except as permitted under Section 18 hereof). Except as permitted under this
Section 16, no amendment, suspension or termination of the Plan shall, without
the consent of the holder of the Option or Stock Appreciation Rights, alter or
impair rights or obligations under any Option or Stock Appreciation Rights
theretofore granted under the Plan.
18. EFFECT OF CHANGES IN CAPITALIZATION
(a) Changes in Stock. If the outstanding shares of
Stock are increased or decreased or changed into or exchanged for a different
number or kind of shares or other securities of the Company by reason of any
recapitalization, reclassification, stock split, reverse split, combination of
shares, exchange of shares, stock dividend or other distribution payable in
capital stock, or other increases or decreases in such shares effected without
receipt of consideration by the Company, occurring after the effective date of
the Plan, the number and kinds of shares of Stock for the purchase of which
Options and Stock Appreciation Rights may be granted under the Plan shall be
adjusted proportionately and accordingly by the Company. In addition, the
number and kind of shares of Stock for which Options and Stock Appreciation
Rights are outstanding shall be adjusted proportionately and accordingly so
that the proportionate interest of the holder of the Option and Stock
Appreciation Rights immediately following such event shall, to the extent
practicable, remain the same as immediately prior to such event. Any such
adjustment in outstanding Options and Stock Appreciation Rights shall not
change the aggregate Option Price payable with respect to shares of Stock
subject to the unexercised portion of the Option outstanding but shall include
a corresponding proportionate adjustment in the Option Price per share.
(b) Reorganization in Which the Company Is the
Surviving Corporation. Subject to Subsection (c) hereof, if the Company shall
be the surviving corporation in any
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reorganization, merger, or consolidation of the Company with one or more other
corporations, any Option and Stock Appreciation Right theretofore granted
pursuant to the Plan shall pertain to and apply to the securities to which a
holder of the number of shares of Stock subject to such Option Stock
Appreciation Right would have been entitled immediately following such
reorganization, merger, or consolidation, with a corresponding proportionate
adjustment of the Option Price per share so that the aggregate Option Price
thereafter shall be the same as the aggregate Option Price of the shares
remaining subject to the Option immediately prior to such reorganization,
merger, or consolidation.
(c) Reorganization in Which the Company Is Not the
Surviving Corporation or Sale of Assets of Stock. Upon the dissolution or
liquidation of the Company, or upon a merger, consolidation, reorganization or
other business combination of the Company with one or more other entities in
which the Company is not the surviving entity, or upon a sale of all or
substantially all of the assets of the Company to another entity, or upon any
transaction (including, without limitation, a merger or reorganization in which
the Company is the surviving corporation) approved by the Board which results
in any person or entity (or persons or entities acting as a group or otherwise
in concert) owning 80 percent or more of the combined voting power of all
classes of stock of the Company, the Plan and all Options and Stock
Appreciation Rights outstanding hereunder shall terminate, except to the extent
provision is made in writing in connection with such transaction for the
continuation of the Plan and/or the assumption of the Options and Stock
Appreciation Rights theretofore granted, or for the substitution for such
Options and Stock Appreciation Rights of new options covering the stock of a
successor entity, or a parent or subsidiary thereof, with appropriate
adjustments as to the number and kinds of shares and exercise prices, in which
event the Plan and Options and Stock Appreciation Rights theretofore granted
shall continue in the manner and under the terms so provided. In the event of
any such termination of the Plan, each individual holding an Option and/or
Stock Appreciation Right shall have the right immediately prior to the
occurrence of such termination and during such period occurring prior to such
termination as the Board or Committee in its sole discretion shall determine
and designate, to exercise such Option or Stock Appreciation Right in whole or
in part, whether or not such Option or Stock Appreciation Right was otherwise
exercisable at the time such termination occurs and without regard to any
installment limitation on exercise imposed pursuant to Section 10(b) above. The
Board or Committee shall send written notice of an event that will result in
such a termination to all individuals who hold Options or Stock Appreciation
Rights not later than the time at which the Company gives notice thereof to its
stockholders.
(d) Adjustments. Adjustments under this Section 18
related to Stock or securities of the Company shall be made by the Board or
Committee, whose determination in that respect shall be final, binding, and
conclusive. No fractional shares of Stock or units of other securities shall be
issued pursuant to any such adjustment, and any fractions resulting from any
such adjustment shall be eliminated in each case by rounding downward to the
nearest whole share or unit.
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(e) No Limitations on Company. The grant of an
Option or Stock Appreciation Rights pursuant to the Plan shall not affect or
limit in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, consolidate, dissolve or liquidate or to sell or
transfer all or any part of its business or assets.
19. DISCLAIMER OF RIGHTS
No provision in the Plan or in any Option or Stock Appreciation Rights
granted or Option Agreement or Stock Appreciation Rights Agreement entered into
pursuant to the Plan shall be construed to confer upon any individual the right
to remain in the employ or service of the Company or any Subsidiary, or to
interfere in any way with the right and authority of the Company or any
Subsidiary either to increase or decrease the compensation of any individual at
any time, or to terminate any employment or other relationship between any
individual and the Company or any Subsidiary.
20. NONEXCLUSIVITY OF THE PLAN
Neither the adoption of the Plan nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations upon the right and authority of the Board to adopt such other
incentive compensation arrangements (which arrangements may be applicable
either generally to a class or classes or individuals or specifically to a
particular individual or individuals) as the Board in its discretion determines
desirable, including, without limitation, the granting of stock options
otherwise than under the Plan.
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