EXHIBIT 10.8
INTERCARDIA, INC.
1994 STOCK OPTION PLAN, AS AMENDED
1. PURPOSE.
The purpose of this plan (the "Plan") is to secure for INTERCARDIA, INC. (the
"Company") and its shareholders the benefits arising from capital stock
ownership by employees, officers and directors of, and consultants or advisors
to, the Company, the Company's parent, Interneuron Pharmaceuticals, Inc.
("Interneuron") and the Company's subsidiary corporations who are expected to
contribute to the Company's future growth and success. Those provisions of the
Plan which make express reference to Section 422 shall apply only to Incentive
Stock Options (as that term is defined in the Plan).
2. TYPE OF OPTIONS AND ADMINISTRATION.
(a) TYPES OF OPTIONS. Options granted pursuant to the Plan shall be authorized
by action of the Board of Directors of the Company (or a Committee designated by
the Board of Directors) and may be either incentive stock options ("Incentive
Stock Options") meeting the requirements of Section 422 of the Internal Revenue
Code of 1986, as amended or replaced from time to time (the "Code") or
non-statutory options which are not intended to meet the requirements of Section
422 of the Code.
(b) ADMINISTRATION. The Plan will be administered by the Board of Directors or a
committee (the "Committee") appointed by the Board of Directors of the Company,
whose construction and interpretation of the terms and provisions of the Plan
shall be final and conclusive. The delegation of powers to the Committee shall
be consistent with applicable laws or regulations (including, without
limitation, applicable state law and Rule 16b-3 promulgated under the Securities
Exchange Act of 1934 (the "Exchange Act"), or any successor rule ("Rule
16b-3")). The Committee may in its sole discretion grant options to purchase
shares of the Company's Common Stock, $.001 par value per share ("Common
Stock"), and issue shares upon exercise of such options as provided in the Plan.
The Committee shall have authority, subject to the express provisions of the
Plan, to construe the respective option agreements and the Plan, to prescribe,
amend and rescind rules and regulations relating to the Plan, to determine the
terms and provisions of the respective option agreements, which need not be
identical, and to make all other determinations in the judgment of the Committee
necessary or desirable for the administration of the Plan. The Committee may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any option agreement in the manner and to the extent it shall deem
expedient to carry the Plan into effect and it shall be the sole and final judge
of such expediency. No director or person acting pursuant to authority delegated
by the Board of Directors shall be liable for any action or determination under
the Plan made in good faith. Subject to adjustment as provided in Section 15
below, the aggregate number of shares of
Common Stock that may be subject to options granted to any person in a calendar
year shall not exceed 300,000 shares.
(c) APPLICABILITY OF RULE 16B-3. Those provisions of the Plan which make express
reference to Rule 16b-3 shall apply to the Company only at such time as the
Company's Common Stock is registered under the Exchange Act, subject to the last
sentence of Section 3(b), and then only to such persons as are required to file
reports under Section 16(a) of the Exchange Act (a "Reporting Person").
3. ELIGIBILITY.
(a) GENERAL. Options may be granted to persons who are, at the time of grant,
employees, officers or directors of, or consultants or advisors to, the Company,
Interneuron, or any subsidiaries of the Company as defined in Sections 424(e)
and 424(f) of the Code ("Participants") provided, that Incentive Stock Options
may only be granted to individuals who are employees of the Company (within the
meaning of Section 3401(c) of the Code). A person who has been granted an option
may, if he or she is otherwise eligible, be granted additional options if the
Committee shall so determine.
(b) GRANT OF OPTIONS TO REPORTING PERSONS. The selection of a director or an
officer who is a Reporting Person (as the terms "director" and "officer" are
defined for purposes of Rule 16b-3) as a recipient of an option, the timing of
the option grant, the exercise price of the option and the number of shares
subject to the option shall be determined either (i) by the Board of Directors,
[provided all members thereof are "Non-Employee Directors" as hereinafter
defined] (ii) by a committee of the Board of Directors that is composed solely
of two or more Non-Employee Directors having full authority to act in the matter
or (iii) pursuant to provisions for automatic grants set forth in Section 3(c)
below. For the purposes of the Plan, a director shall be deemed to be a
"Non-Employee Director" only if such person is described in Rule 16b-3(b)(3) as
interpreted from time to time. [If at least two of the members of the Board of
Directors do not qualify as Non-Employee Directors within the meaning of Rule
16b-3, as such term is interpreted from time to time, then the granting of
options to officers and directors who are Reporting Persons under the Plan shall
not be determined in accordance with this Section 3(b) but shall be determined
in accordance with the other provisions of the Plan].
(c) DIRECTORS' OPTIONS. Directors of the Company who are not employees
("Eligible Directors") will receive an option ("Initial Director Option") to
purchase 5,000 shares of Common Stock on the date that such person first becomes
an Eligible Director. As long as an Eligible Director is a member of the Board
of Directors, such Eligible Director will automatically be granted a stock
option ("Automatic Grant") to purchase 3,000 shares of Common Stock on the day
of each annual meeting of stockholders, except for Eligible Directors who
received an Initial Director Option since the most recent Automatic Grant.
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The exercise price for each share subject to a Director Option shall be equal to
the fair market value of the Common Stock on the date of grant. Director Options
shall become exercisable in 36 equal monthly installments commencing one month
from the date the option is granted and will expire the earlier of 10 years
after the date of grant or 90 days after the termination of the director's
service on the Board.
4. STOCK SUBJECT TO PLAN.
The stock subject to options granted under the Plan shall be shares of
authorized but unissued or reacquired Common Stock. Subject to adjustment as
provided in Section 15 below, the maximum number of shares of Common Stock of
the Company which may be issued and sold under the Plan is 2,500,000. If an
option granted under the Plan shall expire, terminate or is cancelled for any
reason without having been exercised in full, the unpurchased shares subject to
such option shall again be available for subsequent option grants under the
Plan.
5. FORMS OF OPTION AGREEMENTS.
As a condition to the grant of an option under the Plan, each recipient of an
option shall execute an option agreement in such form not inconsistent with the
Plan as may be approved by the Board of Directors. Such option agreements may
differ among recipients.
6. PURCHASE PRICE.
(a) GENERAL. The purchase price per share of stock deliverable upon the exercise
of an option shall be determined by the Board of Directors or the Committee at
the time of grant of such option; PROVIDED, HOWEVER, that in the case of an
Incentive Stock Option, the exercise price shall not be less than 100% of the
Fair Market Value (as hereinafter defined) of such stock, at the time of grant
of such option, or less than 110% of such Fair Market Value in the case of
options described in Section 11(b). "Fair Market Value" of a share of Common
Stock of the Company as of a specified date for the purposes of the Plan shall
mean the closing price of a share of the Common Stock on the principal
securities exchange (including the Nasdaq National Market) on which such shares
are traded on the day as of which Fair Market Value is being determined, or on
the next preceding date on which such shares are traded if no shares were traded
on such day, or if the shares are not traded on a securities exchange, Fair
Market Value shall be deemed to be the average of the high bid and low asked
prices
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of the shares in the over-the-counter market on the day immediately preceding
the date as of which Fair Market Value is being determined or on the next
preceding date on which such high bid and low asked prices were recorded. If the
shares are not publicly traded, Fair Market Value of a share of Common Stock
(including, in the case of any repurchase of shares, any distributions with
respect thereto which would be repurchased with the shares) shall be determined
in good faith by the Board of Directors. In no case shall Fair Market Value be
determined with regard to restrictions other than restrictions which, by their
terms, will never lapse.
(b) PAYMENT OF PURCHASE PRICE. Options granted under the Plan may provide for
the payment of the exercise price by delivery of cash or a check to the order of
the Company in an amount equal to the exercise price of such options, or by any
other means which the Board of Directors determines are consistent with the
purpose of the Plan and with applicable laws and regulations (including, without
limitation, the provisions of Rule 16b-3 and Regulation T promulgated by the
Federal Reserve Board).
7. OPTION PERIOD.
Subject to earlier termination as provided in the Plan, each option and all
rights thereunder shall expire on such date as determined by the Board of
Directors or the Committee and set forth in the applicable option agreement,
PROVIDED, that such date shall not be later than (10) ten years after the date
on which the option is granted.
8. EXERCISE OF OPTIONS.
Each option granted under the Plan shall be exercisable either in full or in
installments at such time or times and during such period as shall be set forth
in the option agreement evidencing such option, subject to the provisions of the
Plan. No option granted to a Reporting Person for purposes of the Exchange Act,
however, shall be exercisable during the first six months after the date of
grant. Subject to the requirements in the immediately preceding sentence, if an
option is not at the time of grant immediately exercisable, the Board of
Directors may (i) in the agreement evidencing such option, provide for the
acceleration of the exercise date or dates of the subject option upon the
occurrence of specified events, and/or (ii) at any time prior to the complete
termination of an option, accelerate the exercise date or dates of such option.
9. TRANSFERABILITY OF OPTIONS.
(a) No Incentive Stock Option granted under this Plan shall be assignable or
otherwise transferable by the optionee except by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order as defined
in the Code or Title I of the Employee Retirement Income Security Act, or the
rules thereunder. An
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Incentive Stock Option may be exercised during the lifetime of the optionee only
by the optionee.
(b) Any option granted under the Plan other than an Incentive Stock Option shall
be transferable by the optionee to members of his or her family or otherwise by
will or by the laws of descent and distribution or pursuant to a qualified
domestic relations order as defined in the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder. For purposes of the
Plan, an optionee's "family members" shall be deemed to consist of his or her
spouse, parents, children, grandparents, grandchildren and any trusts created
for the benefit of such individuals. A family member to whom an option has been
transferred pursuant to this Section 9(b) shall be hereinafter referred to as a
"Permitted Transferee". An option shall be transferred to a Permitted Transferee
in accordance with the foregoing provisions by the optionee's execution of an
assignment in writing in such form approved by the Board of Directors or the
Committee. The Company shall not be required to recognize the rights of a
Permitted Transferee until such time as it receives a copy of the assignment
from the optionee.
(c) In the event an optionee dies during his employment by the Company or any of
its subsidiaries, or during the three-month period following the date of
termination of such employment, his options shall thereafter be exercisable,
during the period specified in the option agreement, by his executors,
administrators or Permitted Transferees to the full extent to which such options
were exercisable by the optionee at the time of his death during the periods set
forth in Section 10 or 11(d).
10. EFFECT OF TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIP.
Except as provided in Section 11(d) with respect to Incentive Stock Options and
except as otherwise determined by the Committee at the date of grant of an
option, and subject to the provisions of the Plan, an optionee or his Permitted
Transferee may exercise an option at any time within three (3) months following
the termination of the optionee's employment or other relationship with the
Company or within one (1) year if such termination was due to the death or
disability of the optionee but, except in the case of the optionee's death, in
no event later than the expiration date of the option. If the termination of the
optionee's employment or other relationship with the Company is for cause or is
otherwise attributable to a breach by the optionee of an employment, consulting,
confidentiality or non-disclosure agreement, the option shall expire immediately
upon such termination. The Board or Directors shall have the power to determine
what constitutes a termination for cause or a breach of an employment,
consulting, confidentiality or non-disclosure agreement, whether an optionee has
been terminated for cause or has breached such an agreement, and the date upon
such termination for cause or breach occurs. Any such determinations shall be
final and conclusive and binding upon the optionee.
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11. INCENTIVE STOCK OPTIONS
Options granted under the Plan which are intended to be Incentive Stock Options
shall be subject to the following additional terms and conditions:
(a) EXPRESS DESIGNATION. All Incentive Stock Options granted under the Plan
shall, at the time of grant, be specifically designated as such in the option
agreement covering such Incentive Stock Options.
(b) 10% STOCKHOLDER. If any employee to whom an Incentive Stock Option is to be
granted under the Plan is, at the time of the grant of such option, the owner of
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company (after taking into account the attribution of stock
ownership rules of Section 424(d) of the Code), then the following special
provisions shall be applicable to the Incentive Stock Option granted to such
individual:
(i) The purchase price per share of the Common Stock subject to such Incentive
Stock Option shall not be less than 110% of the Fair Market Value of one share
of Common Stock at the time of grant; and
(ii) the option exercise period shall not exceed five years from the date of
grant.
(c) DOLLAR LIMITATION. For so long as the Code shall so provide, options granted
to any employee under the Plan (and any other incentive stock option plans of
the Company) which are intended to constitute Incentive Stock Options shall not
constitute Incentive Stock Options to the extent that such options, in the
aggregate, become exercisable for the first time in any one calendar year for
shares of Common Stock with an aggregate Fair Market Value, as of the respective
date or dates of grant, of more than $100,000.
(d) TERMINATION OF EMPLOYMENT. Death or Disability. No Incentive Stock Option
may be exercised unless, at the time of such exercise, the optionee is, and has
been continuously since the date of grant of his or her option, employed by the
Company, except that:
(i) an Incentive Stock Option may be exercised within the period of three months
after the date the optionee ceases to be an employee of the Company (or within
such lesser period as may be specified in the applicable option agreement),
provided, that the agreement with respect to such option may designate a longer
exercise period and that the exercise after such three-month period shall be
treated as the exercise of a non-statutory option under the Plan;
(ii) if the optionee dies while in the employ of the Company, or within three
months after the optionee ceases to be such an employee, the Incentive Stock
Option may be exercised by the person to whom it is transferred by will or the
laws of descent and
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distribution within the period of one year after the date of death (or within
such lesser period as may be specified in the applicable option agreement); and
(iii) if the optionee becomes disabled (within the meaning of Section 22(e)(3)
of the Code or any successor provisions thereto) while in the employ of the
Company, the Incentive Stock Option may be exercised within the period of one
year after the date the optionee ceases to be such an employee because of such
disability (or within such lesser period as may be specified in the applicable
option agreement).
For all purposes of the Plan and any option granted hereunder, "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Income Tax Regulations (or any successor regulations). Notwithstanding the
foregoing provisions, no Incentive Stock Option may be exercised after its
expiration date.
12. ADDITIONAL PROVISIONS.
(a) ADDITIONAL OPTION PROVISIONS. The Board of Directors or the Committee may,
in its sole discretion, include additional provisions in option agreements
covering options granted under the Plan, including without limitation
restrictions on transfer, repurchase rights, rights of first refusal,
commitments to pay cash bonuses, to make, arrange for or guaranty loans or to
transfer other property to optionees upon exercise of options, or such other
provisions as shall be determined by the Board of Directors; PROVIDED, that such
additional provisions shall not be inconsistent with any other term or condition
of the Plan and such additional provisions shall not cause any Incentive Stock
Option granted under the Plan to fail to qualify as an Incentive Stock Option
within the meaning of Section 422 of the Code.
(b) ACCELERATION, EXTENSION, ETC. The Board of Directors may, in its sole
discretion, (i) accelerate the date or dates on which all or any particular
option or options granted under the Plan may be exercised or (ii) extend the
dates during which all, or any particular, option or options granted under the
Plan may be exercised; PROVIDED, HOWEVER, that no such extension shall be
permitted if it would cause the Plan to fail to comply with Section 422 of the
Code or with Rule 16b-3 (if applicable).
13. GENERAL RESTRICTIONS.
(a) INVESTMENT REPRESENTATIONS. The Company may require any person to whom an
option is granted, as a condition of exercising such option or award, to give
written assurances in substance and form satisfactory to the Company to the
effect that such person is acquiring the Common Stock subject to the option or
award, for his or her own account for investment and not with any present
intention of selling or otherwise distributing the same, and to such other
effects as the Company deems necessary or appropriate in order to comply with
federal and applicable state securities laws, or with covenants or
representations made by the Company in connection with
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any public offering of its Common Stock, including any "lock-up" or other
restriction on transferability.
(b) COMPLIANCE WITH SECURITIES LAW. Each option shall be subject to the
requirement that if, at any time, counsel to the Company shall determine that
the listing, registration or qualification of the shares subject to such option
or award upon any securities exchange or automated quotation system or under any
state or federal law, or the consent or approval of any governmental or
regulatory body, or that the disclosure of non-public information or the
satisfaction of any other condition is necessary as a condition of, or in
connection with the issuance or purchase of shares thereunder, such option or
award may not be exercised, in whole or in part, unless such listing,
registration, qualification, consent or approval, or satisfaction of such
condition shall have been effected or obtained on conditions acceptable to the
Board of Directors or the Committee. Nothing herein shall be deemed to require
the Company to apply for or to obtain such listing, registration or
qualification, or to satisfy such condition.
14. RIGHTS AS A STOCKHOLDER.
The holder of an option shall have no rights as a stockholder with respect to
any shares covered by the option (including, without limitation, any rights to
receive dividends or non-cash distributions with respect to such shares) until
the date of issue of a stock certificate to him or her for such shares. No
adjustment shall be made for dividends or other rights for which the record date
is prior to the date such stock certificate is issued.
15. ADJUSTMENT PROVISIONS FOR RECAPITALIZATIONS, REORGANIZATIONS AND RELATED
TRANSACTIONS.
(a) RECAPITALIZATIONS AND RELATED TRANSACTIONS. If, through or as a result of
any recapitalization, reclassification, stock dividend, stock split, reverse
stock split or other similar transaction, (i) the outstanding shares of Common
Stock are increased, decreased or exchanged for a different number or kind of
shares or other securities of the Company, or (ii) additional shares or new or
different shares or other non-cash assets are distributed with respect to such
shares of Common Stock or other securities, an appropriate and proportionate
adjustment shall be made in (x) the maximum number and kind of shares reserved
for issuance under or otherwise referred to in the Plan, (y) the number and kind
of shares or other securities subject to any then outstanding options under the
Plan, and (z) the price for each share subject to any then outstanding options
under the Plan, without changing the aggregate purchase price as to which such
options remain exercisable. Notwithstanding the foregoing, no adjustment shall
be made pursuant to this Section 15 if such adjustment (i) would cause the Plan
to fail to comply with Section 422 of the Code or with Rule 16b-3 or (ii) would
be considered as the adoption of a new plan requiring stockholder approval.
(b) REORGANIZATION, MERGER AND RELATED TRANSACTIONS. All outstanding options
under the Plan shall become fully exercisable for a period of sixty
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(60) days following the occurrence of any Trigger Event, whether or not such
options are then exercisable under the provisions of the applicable agreements
relating thereto. For purposes of the Plan, a "Trigger Event" is any one of the
following events:
(i) the date on which shares of Common Stock are first purchased pursuant to a
tender offer or exchange offer (other than such an offer by the Company, any
Subsidiary, any employee benefit plan of the Company or of any Subsidiary or any
entity holding shares or other securities of the Company for or pursuant to the
terms of such plan), whether or not such offer is approved or opposed by the
Company and regardless of the number of shares purchased pursuant to such offer;
(ii) the date the Company acquires knowledge that any person or group deemed a
person under Section 13(d)-3 of the Exchange Act (other than the Company,
Interneuron, any Subsidiary, any employee benefit plan of the Company or of any
Subsidiary or any entity holding shares of Common Stock or other securities of
the Company for or pursuant to the terms of any such plan or any individual or
entity or group or affiliate thereof which acquired its beneficial ownership
interest prior to the date the Plan was adopted by the Board), in a transaction
or series of transactions, has become the beneficial owner, directly or
indirectly (with beneficial ownership determined as provided in Rule 13d-3, or
any successor rule, under the Exchange Act), of securities of the Company
entitling the person or group to 30% or more of all votes (without consideration
of the rights of any class or stock to elect directors by a separate class vote)
to which all stockholders of the Company would be entitled in the election of
the Board of Directors were an election held on such date;
(iii) the date, during any period of two consecutive years, when individuals who
at the beginning of such period constitute the Board of Directors of the Company
cease for any reason to constitute at least a majority thereof, unless the
election, or the nomination for election by the stockholders of the Company, of
each new director was approved by a vote of at least two-thirds of the directors
then still in office who were directors at the beginning of such period; and
(iv) the date of approval by the stockholders of the Company of an agreement (a
"reorganization agreement") providing for:
(A) The merger or consolidation of the Company with another corporation where
the stockholders of the Company, immediately prior to the merger or
consolidation, do not beneficially own, immediately after the merger or
consolidation, shares of the corporation issuing cash or securities in the
merger or consolidation entitling such stockholders to 80% or more of all votes
(without consideration of the rights of any class of stock to elect directors by
a separate class vote) to which all stockholders of such corporation would be
entitled in the election of directors or where the members of the Board of
Directors of the Company, immediately prior to the merger or consolidation, do
not, immediately after the merger or consolidation, constitute a
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majority of the Board of Directors of the corporation issuing cash or securities
in the merger or consolidation; or
(B) The sale or other disposition of all or substantially all the assets of the
Company.
(C) Board Authority to Make Adjustments. Any adjustments under this Section 15
will be made by the Board of Directors or the Committee, whose determination as
to what adjustments, if any, will be made and the extent thereof will be final,
binding and conclusive. No fractional shares will be issued under the Plan on
account of any such adjustments.
16. MERGER, CONSOLIDATION, ASSET SALE, LIQUIDATION, ETC.
(a) GENERAL. In the event of any sale, merger, transfer or acquisition of the
Company or substantially all of the assets of the Company in which the Company
is not the surviving corporation, and provided that after the Company shall have
requested the acquiring or succeeding corporation (or an affiliate thereof),
that equivalent options shall be substituted and such successor corporation
shall have refused or failed to assume all options outstanding under the Plan or
issue substantially equivalent options, then any or all outstanding options
under the Plan shall accelerate and become exercisable in full immediately prior
to such event. The Committee will notify holders of options under the Plan that
any such options shall be fully exercisable for a period of fifteen (15) days
from the date of such notice, and the options will terminate upon expiration of
such notice.
(b) SUBSTITUTE OPTIONS. The Company may grant options under the Plan in
substitution for options held by employees of another corporation who become
employees of the Company, Interneuron, or a subsidiary of the Company,
Interneuron, as the result of a merger or consolidation of the employing
corporation with the Company or a subsidiary of the Company, Interneuron, or as
a result of the acquisition by the Company, Interneuron, or one of its
subsidiaries, of property or stock of the employing corporation. The Company may
direct that substitute options be granted on such terms and conditions as the
Board of Directors considers appropriate in the circumstances.
17. NO SPECIAL EMPLOYMENT RIGHTS.
Nothing contained in the Plan or in any option shall confer upon any optionee
any right with respect to the continuation of his or her employment by the
Company or interfere in any way with the right of the Company at any time to
terminate such employment or to increase or decrease the compensation of the
optionee.
18. OTHER EMPLOYEE BENEFITS.
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Except as to plans which by their terms include such amounts as compensation,
the amount of any compensation deemed to be received by an employee as a result
of the exercise of an option or the sale of shares received upon such exercise
will not constitute compensation with respect to which any other employee
benefits of such employee are determined, including, without limitation,
benefits under any bonus, pension, profit-sharing, life insurance or salary
continuation plan, except as otherwise specifically determined by the Board of
Directors.
19. AMENDMENT OF THE PLAN.
(a) The Board of Directors may at any time, and from time to time, modify or
amend the Plan in any respect; provided, however, that if at any time the
approval of the stockholders of the Company is required under Section 422 of the
Code or any successor provision with respect to Incentive Stock Options, or
under Rule 16b-3, the Board of Directors may not effect such modification or
amendment without such approval; and provided, further, that the provisions of
Section 3(c) hereof shall not be amended more than once every six months, other
than to comport with changes in the Code, the Employer Retirement Income
Security Act of 1974, as amended, or the rules thereunder.
(b) The modification or amendment of the Plan shall not, without the consent of
an optionee, affect his or her rights under an option previously granted to him
or her. With the consent of the optionee affected, the Board of Directors or the
Committee may amend outstanding option agreements in a manner not inconsistent
with the Plan. The Board of Directors shall have the right to amend or modify
(i) the terms and provisions of the Plan and of any outstanding Incentive Stock
Options granted under the Plan to the extent necessary to qualify any or all
such options for such favorable federal income tax treatment (including deferral
of taxation upon exercise) as may be afforded incentive stock options under
Section 422 of the Code and (ii) the terms and provisions of the Plan and of any
outstanding option to the extent necessary to ensure the qualification of the
Plan under Rule 16b-3.
20. WITHHOLDING.
(a) The Company shall have the right to deduct from payments of any kind
otherwise due to the optionee any federal, state or local taxes of any kind
required by law to be withheld with respect to any shares issued upon exercise
of options under the Plan. Subject to the prior approval of the Company, which
may be withheld by the Company in its sole discretion, the optionee may elect to
satisfy such obligations, in whole or in part, (i) by causing the Company to
withhold shares of Common Stock otherwise issuable pursuant to the exercise of
an option or (ii) by delivering to the Company shares of Common Stock already
owned by the optionee. The shares so delivered or withheld shall have a Fair
Market Value equal to such withholding obligation as of the date that the amount
of tax to be withheld is to be determined. An optionee who has made an election
pursuant to this Section 20(a) may only satisfy his
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or her withholding obligation with shares of Common Stock which are not subject
to any repurchase, forfeiture, unfulfilled vesting or other similar
requirements.
(b) The acceptance of shares of Common Stock upon exercise of an Incentive Stock
Option shall constitute an agreement by the optionee (i) to notify the Company
if any or all of such shares are disposed of by the optionee within two years
from the date the option was granted or within one year from the date the shares
were issued to the optionee pursuant to the exercise of the option, and (ii) if
required by law, to remit to the Company, at the time of and in the case of any
such disposition, an amount sufficient to satisfy the Company's federal, state
and local withholding tax obligations with respect to such disposition, whether
or not, as to both (i) and (ii), the optionee is in the employ of the Company at
the time of such disposition.
(c) Notwithstanding the foregoing, in the case of a Reporting Person whose
options have been granted in accordance with the provisions of Section 3(b)
herein, no election to use shares for the payment of withholding taxes shall be
effective unless made in compliance with any applicable requirements of Rule
16b-3.
21. CANCELLATION AND NEW GRANT OF OPTIONS, ETC.
The Board of Directors or the Committee shall have the authority to effect, at
any time and from time to time, with the consent of the affected optionees, (i)
the cancellation of any or all outstanding options under the Plan and the grant
in substitution therefor of new options under the Plan covering the same or
different numbers of shares of Common Stock and having an option exercise price
per share which may be lower or higher than the exercise price per share of the
cancelled options or (ii) the amendment of the terms of any and all outstanding
options under the Plan to provide an option exercise price per share which is
higher or lower than the then-current exercise price per share of such
outstanding options.
22. EFFECTIVE DATE AND DURATION OF THE PLAN.
(a) EFFECTIVE DATE. The Plan shall become effective when adopted by the Board of
Directors, but no Incentive Stock Option granted under the Plan shall become
exercisable unless and until the Plan shall have been approved by the Company's
stockholders. If such stockholder approval is not obtained within twelve months
after the date of the Board's adoption of the Plan, no options previously
granted under the Plan shall be deemed to be Incentive Stock Options and no
Incentive Stock Options shall be granted thereafter. Amendments to the Plan not
requiring stockholder approval shall become effective when adopted by the Board
of Directors; amendments requiring stockholder approval (as provided in Section
19) shall become effective when adopted by the Board of Directors, but no
Incentive Stock Option granted after the date of such amendment shall become
exercisable (to the extent that such amendment to the Plan was required to
enable the Company to grant such Incentive Stock Option to a particular
optionee) unless and until such amendment shall have been approved by the
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Company's stockholders. If such stockholder approval is not obtained within
twelve months of the Board's adoption of such amendment, any Incentive Stock
Options granted on or after the date of such amendment shall terminate to the
extent that such amendment to the Plan was required to enable the Company to
grant such option to a particular optionee. Subject to this limitation, options
may be granted under the Plan at any time after the effective date and before
the date fixed for termination of the Plan.
(b) TERMINATION. Unless sooner terminated in accordance with Section 16, the
Plan shall terminate upon the earlier of (i) the close of business on the day
next preceding the tenth anniversary of the date of its adoption by the Board of
Directors, or (ii) the date on which all shares available for issuance under the
Plan shall have been issued pursuant to the exercise or cancellation of options
granted under the Plan. If the date of termination is determined under (i)
above, then options outstanding on such date shall continue to have force and
effect in accordance with the provisions of the instruments evidencing such
options.
23. GOVERNING LAW.
The provisions of this Plan shall be governed and construed in accordance with
the laws of the State of Delaware without regard to the principles of conflicts
of laws.
Adopted by the Board of Directors on October 31, 1994.
As amended by the Board of Directors through December 12, 1997.
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