EXHIBIT 10.8
MEDE AMERICA CORPORATION AND ITS SUBSIDIARIES
1998 STOCK OPTION AND RESTRICTED STOCK PURCHASE PLAN
Section 1. Purpose. The purpose of the MEDE AMERICA
Corporation and its Subsidiaries 1998 Stock Option and Restricted Stock Purchase
Plan (the "Plan") is to promote the interests of MEDE AMERICA Corporation, a
Delaware corporation (the "Company"), and any Subsidiary thereof and the
interests of the Company's stockholders by providing an opportunity to selected
Employees, Consultants and Non-Employee Directors of the Company to purchase
Common Stock of the Company, thereby enhancing the Company's ability to attract,
retain, motivate and encourage such persons to devote their best efforts to the
business and financial success of the Company. It is intended that this purpose
will be effected by awards of Non-Qualified Stock Options, Incentive Stock
Options, Restricted Stock and/or Unrestricted Stock.
Section 2. Definitions. For purposes of the Plan, the
following terms used herein have the following meanings, unless a different
meaning is clearly required by the context:
2.1. "Administrator" means the Board of Directors or any
Committees that shall be administering the Plan in accordance with Section 4
hereof.
2.2. "Annual Option" means a Non-Qualified Stock Option
granted to a Non- Employee Director on the next business day following each
annual meeting of stockholders at which such Non-Employee Director is elected as
a Director, other than the annual meeting of stockholders at which such
Non-Employee Director is initially elected a Director.
2.3. "Applicable Laws" means the legal requirements relating
to the administration of stock option plans under state corporate laws, federal
and state securities laws and the Code.
2.4. "Award" means any award of an Option or Stock under the
Plan.
2.5. "Board of Directors" means the Board of Directors of the
Company.
2.6. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
2.7. "Committee" means any committee appointed by the Board
of Directors in accordance with Section 4 of the Plan.
2.8. "Common Stock" means the Common Stock, $.01 par value,
of the Company.
2.9. "Consultant" means any person, including an advisor,
engaged by the Company or a Parent or Subsidiary of the Company to render
services and who is compensated for such services; provided that the term
"Consultant" shall not include Directors who are paid only a director's fee by
the Company or who are not compensated by the Company for their services as
Directors.
2.10. "Designated Beneficiary" means the beneficiary
designated by a Participant, in a manner determined by the Administrator, to
receive amounts due or exercise rights of the Participant in the event of the
Participant's death. In the absence of an effective designation by a
Participant, Designated Beneficiary shall mean the Participant's estate.
2.11. "Director Option" means an Initial Option or an Annual
Option..
2.12. "Director" means any member of the Board of Directors.
2.13. "Employee" means any person, including without
limitation, an officer of the Company, who, is employed by the Company or any
Parent or Subsidiary of the Company. Neither service as a Director nor payment
of a director's fee by the Company shall constitute "employment" by the Company.
2.14. "Fair Market Value" means, as of any date, the value of
Common Stock determined as follows:
(i) If the Common Stock is listed on any established
stock exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers, Inc.
Automated Quotation ("NASDAQ") System, the Fair Market Value of a share of
Common Stock shall be the closing sales price for such stock (or the closing
bid, if no sales were reported) as quoted on such system or exchange (or the
exchange with the greatest volume of trading in Common Stock) on the last market
trading day prior to the day of determination, as reported in the Wall Street
Journal or such other source as the Administrator deems reliable;
(ii) If the Common Stock is quoted on the NASDAQ System
(but not on the National Market System thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a share of Common Stock shall be the average between the high
bid and low asked prices for the Common Stock on the last market trading day
prior to the day of determination, as reported in the Wall Street Journal or
such other source as the Administrator deems reliable; or
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(iii) In the absence of an established market for the
Common Stock, the Fair Market Value shall be determined in good faith by the
Administrator.
2.15. "Incentive Stock Option" means an Option granted to a
Participant pursuant to Section 6 (including Section 6.7 thereof) which is
intended to meet the requirements of Section 422 of the Code or any successor
provision.
2.16. "Initial Option" means a Non-Qualified Stock Option
granted pursuant to Section 6.8 to a Non-Employee Director on the first business
day following his or her initial election to the Board of Directors.
2.17. "Non-Employee Director" means a Director who is not an
employee of the Company or any Parent, Subsidiary or affiliate of the Company
and is not (and is not affiliated with) a beneficial owner of 5% or more of the
voting stock of the Company.
2.18. "Non-Qualified Stock Option" means an Option granted to
a Participant pursuant to Section 6 that is not intended to be an Incentive
Stock Option.
2.19. "Option" means any Incentive Stock Option or
Non-Qualified Stock Option.
2.20. "Parent" of the Company shall have the meaning set forth
in Section 424(e) of the Code.
2.21. "Participant" means any Employee, Consultant or
Non-Employee Director to whom an Award is granted under the Plan.
2.22. "Restricted Period" means the period of time selected by
the Administrator during which shares subject to an Award of Restricted Stock
may be repurchased by or forfeited to the Company.
2.23. "Reporting Person" means a Participant that is subject
to Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act").
2.24. "Restricted Stock" means shares of Common Stock awarded
to a Participant under Section 7.
2.25. "Stock" means shares of Restricted Stock or Unrestricted
Stock.
2.26. "Subsidiary" of the Company shall have the meaning set
forth in Section 424(f) of the Code.
2.27. "Unrestricted Stock" means shares of Common Stock
awarded to a Participant under Section 7 free of any restrictions under the
Plan.
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Section 3. Common Stock Subject to the Plan.
3.1. Number of Shares. The total number of shares of Common
Stock for which Awards may be granted under the Plan shall not exceed in the
aggregate [1,500,000 (###)] shares of Common Stock (subject to adjustment as
provided in Section 3.3 hereof). The Company, during the term of this Plan, will
at all times reserve and keep available such number of shares of Common Stock as
shall be sufficient to satisfy the requirements of the Plan.
3.2. Reissuance. The shares of Common Stock that may be
subject to Awards under the Plan may be either authorized and unissued shares or
shares reacquired at any time and now or hereafter held as treasury stock as the
Administrator may determine. In the event that any outstanding Option expires,
is terminated, forfeited or becomes unexercisable for any reason without having
been exercised in full, the shares allocable to the unexercised portion of such
Option may again be subject to an Award under the Plan, subject, in the case of
Incentive Stock Options, to any limitation required by the Code. If any shares
of Common Stock issued or sold pursuant to a Stock award or the exercise of an
Option shall have been repurchased by the Company, then such shares shall not
again be available for future grant or award under the Plan.
3.3. Stock Dividends, Etc.. In the event that the
Administrator, in its sole discretion, determines that any stock dividend,
extraordinary cash dividend, recapitalization, reorganization, merger,
consolidation, split-up, spin-off, combination or other similar transaction
affects the Common Stock such that an adjustment is required in order to
preserve or prevent enlargement of the benefits or potential benefits intended
to be made available under the Plan, then the Administrator, subject, in the
case of Incentive Stock Options, to any limitation required under the Code, may
equitably adjust any or all of (i) the number and kind of shares in respect of
which Awards may be made under the Plan, (ii) the number and kind of shares
subject to outstanding Awards and (iii) the award, exercise or conversion price
with respect to any of the foregoing, and if considered appropriate, the
Administrator may cause the number of shares subject to any Award always to be a
whole number.
The Administrator may make Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company as a result of a
merger or consolidation of the employing company with the Company or a Parent or
Subsidiary of the Company or the acquisition by the Company or a Parent or
Subsidiary of the Company of property or stock of the employing corporation. The
substitute Awards shall be granted on such terms and conditions as the
Administrator deems appropriate under the circumstances.
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Section 4. Administration of the Plan.
4.1. Procedure.
(a) Multiple Administrative Bodies. The Plan may be
administered by different Committees with respect to different groups
of Participants.
(b) Section 162(m). To the extent that the Administrator
determines it to be desirable to qualify Options granted hereunder as
"performance-based compensation" within the meaning of Section 162(m)
of the Code, the Plan shall be administered by a Committee consisting
of two or more Non-Employee Directors.
(c) Rule 16b-3. To the extent that the Administrator
determines it to be desirable to qualify transactions hereunder as
exempt under Rule 16b-3 of the Exchange Act, the transactions
contemplated hereunder shall be structured to satisfy the requirements
for exemption under Rule 16b-3.
(d) Other Administration. Other than as provided above,
the Plan shall be administered by (i) the Board of Directors or (ii) a
Committee, which committee shall be constituted to satisfy Applicable
Laws.
4.2. Powers of the Administrator. Subject to the
provisions of the Plan, and in the case of a Committee, subject to the specific
powers delegated by the Board of Directors to such Committee, the Administrator
shall have the authority, in its discretion:
(a) to determine the Fair Market Value of the Common
Stock, in accordance with Section 2.14 of the Plan;
(b) to select the Employees and Consultants to whom
Awards may be granted hereunder;
(c) to determine whether and to what extent awards of
Options and Stock, or any combination thereof, are granted hereunder;
(d) to determine the number of shares of Common Stock to
be covered by each Award made hereunder;
(e) to determine the amount (not less than par value per
share) and the form of the consideration that may be used to purchase
shares of Common Stock pursuant to any Stock award or upon exercise of
any Option (including, without limitation, the circumstances under
which issued and outstanding shares of Common Stock owned by a
Participant may be used by the Participant to exercise an Option);
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(f) to approve forms of agreements for use under the
Plan;
(g) to determine the terms and conditions, not
inconsistent with the terms of the Plan, of any Award granted
hereunder, including without limitation, the exercise price, the time
or times when Options may be exercised (which may be based on
performance criteria), any vesting, acceleration or waiver of
forfeiture restrictions and any restriction or limitation regarding any
Award or the shares of Common Stock relating thereto, based in each
case on such factors as the Administrator, in its sole discretion,
shall determine;
(h) to reduce the exercise price of any Option to the
then current Fair Market Value if the Fair Market Value of the Common
Stock covered by such Option shall have declined since the date the
Option was granted;
(i) to construe and interpret the terms of the Plan:
(j) to prescribe, amend and rescind rules and regulations
relating to the Plan;
(k) to modify or amend the terms of any Award;
(l) to accelerate vesting periods with respect to
outstanding Options and the end of Restricted Periods with respect to
Stock Awards; provided, however, that any Incentive Stock Options may
only be"accelerated" in accordance with Section 424(h) of the Code;
(m) to authorize any person to execute on behalf of the
Company any instrument required to effect any Award granted by the
Administrator; and
(n) to exercise all other powers granted to the
Administrator under the Plan and make all other determinations deemed
necessary or advisable for administering the Plan.
4.3. Effect of Administrator's Decision. The
Administrator's decisions, determinations and interpretations shall be
final and binding on all Participants and any other holders of Options
or Stock awarded under the Plan .
4.4. Expenses, Etc. All expenses and liabilities incurred
by the Administrator in the administration of the Plan shall be borne
by the Company. The Administrator may employ attorneys, consultants,
accountants or other persons in connection with the administration of
the Plan. The Company, and its officers and directors, shall be
entitled to rely upon the advice, opinions or valuations of any such
persons. No member of the Administrator shall be liable for any action,
determination or interpretation taken or made in good faith with
respect to the Plan or any Award granted thereunder.
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Section 5. Eligibility. Awards may be granted to any Employee,
Consultant or Non-Employee Director. The Administrator shall have the sole
authority to select the Employees and Consultants to whom discretionary Awards
are to be granted hereunder, and to determine whether a person is to be granted
a Non-Qualified Stock Option, an Incentive Stock Option, Restricted Stock or
Unrestricted Stock, or any combination thereof. Non-Employee Directors shall
only be eligible to receive grants of Non-Qualified Stock Options pursuant to
Section 6.8 of the Plan. No person other than an Employee, Consultant or
Non-Employee Director shall have any right to participate in the Plan. Any
person selected by the Administrator for participation during any one period
will not by virtue of such participation have the right to be selected as a
Participant for any other period. The maximum number of shares of Common Stock
which may be the subject of Awards granted to any one employee under the Plan
during any calendar year shall be 300,000 shares. For this purpose, the grant of
a new Award in substitution for outstanding Awards shall be deemed to constitute
a new grant, separate from the original grant that is to be canceled. Incentive
Stock Options may be granted only to persons eligible to receive Incentive Stock
Options under the Code.
Section 6. Options.
6.1. Subject to the provisions of the Plan, the Administrator
may award Incentive Stock Options and Non-Qualified Stock Options, and determine
the number of shares to be covered by each Option, the option price therefor and
the conditions and limitations applicable to the exercise of the Option. The
terms and conditions of Incentive Stock Options shall be subject to and comply
with Section 422 of the Code, or any successor provision, and any regulations
thereunder.
6.2. Exercise Price. The Administrator shall establish the
exercise price of each Option at the time such Option is awarded. Such price
shall not be less than 85% of the Fair Market Value of the Common Stock on the
date of grant; provided that (i) in the case of an Incentive Stock Option, the
exercise price shall not be less than 100% of the Fair Market Value of the
Common Stock at the time of grant and (ii) in the case of a Non-Qualified Stock
Option intended to qualify as "performance-based compensation" within the
meaning of Section 162(m) of the Code, the exercise price shall not be less than
100% of the Fair Market Value at the time of grant.
6.3. Vesting. Each Option shall be exercisable at such times
and subject to such terms and conditions as the Administrator may specify in the
applicable Option agreement or thereafter. The Administrator may impose such
conditions with respect to the exercise of Options, including conditions
relating to applicable federal or state securities laws, as it considers
necessary or advisable.
6.4. Payment. Options granted under the Plan may provide for
the payment of the exercise price by delivery of cash or check in an amount
equal to the exercise price of such Options or, to the extent permitted by the
Administrator at or after the award of the Option, by
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(a) delivery of shares of Common Stock owned by the optionee, valued at their
Fair Market Value on the date of such option exercise, (b) delivery of a
promissory note of the optionee to the Company on terms determined by the
Administrator, (c) delivery of an irrevocable undertaking by a broker to deliver
promptly to the Company sufficient funds to pay the exercise price or delivery
of irrevocable instructions to a broker to deliver promptly to the Company cash
or a check sufficient to pay the exercise price, (d) payment of such other
lawful consideration as the Administrator may determine or (e) any combination
of the foregoing. In the event an optionee pays some or all of the exercise
price of an Option by delivery of shares of Common Stock pursuant to clause(a)
above, the Administrator may provide for the automatic award of an Option for up
to the number of shares so delivered.
6.5. Transferability. Each Option granted under the Plan shall
provide that neither it nor any interest therein may be transferred, assigned,
pledged or hypothecated, by the optionee or by operation of law otherwise than
by will, the laws of descent and distribution or a "qualified domestic relations
order" (as defined in the Code), and shall be exercised during the lifetime of
the optionee only by the optionee or a transferree pursuant to such a "qualified
domestic relations order". No Option or interest therein may be or be made
subject to execution, attachment or similar process.
6.6. Cancellation and New Grant of Options. The Board of
Directors 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 canceled 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.
6.7. 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) 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. The exercise period shall not
exceed ten years from the date of grant.
(b) 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 rule of Section 424(d) of the Code), then the following
special provisions shall be applicable to the Incentive Stock Option granted to
such individual:
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(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) 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 or its Subsidiaries) 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 (determined as of the respective date or dates of grant) of more
than $100,000.
(d) No Incentive Stock Option may be exercised
unless, at the time of such exercise, the Participant 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 (to
the extent exercisable on the date the Participant ceased to be an
Employee of the Company or a Parent or Subsidiary) within the period of
three months after the date the Participant ceases to be an employee of
the Company or such Parent or Subsidiary (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-Qualified Stock Option under
the Plan;
(ii) if the Participant dies while in the employ of
the Company, or within three months after the Participant ceases to be
an Employee, the Incentive Stock Option (to the extent otherwise
exercisable on the date of death) may be exercised by the Participant's
Designated Beneficiary 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 Participant becomes disabled (within the
meaning of Section 22(e)(3) of the Code or any successor provision
thereto) while in the employ of the Company, the Incentive Stock Option
may be exercised (to the extent otherwise exercisable on the date of
death) within the period of one year after the date of such disability
(or within such lesser period as may be specified in the Option
agreement). In the event of the Participant's death during this
one-year period, the Incentive Stock Option may be exercised by the
Participant's Designated Beneficiary within the period of one year from
the date the Participant became disabled or within such lesser period
as may be specified in the applicable Option agreement.
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For all purposes of the Plan and any Option granted hereunder, (i) "employment"
shall be defined in accordance with the provisions of Section 1.421-7(h) of the
Treasury Regulations under the Code (or any successor regulations) and (ii) any
Option may provide that if such Option shall be assumed or a new Option
substituted therefor in a transaction to which Section 424(a) of the Code
applies, employment by such assuming or substituting corporation shall be
considered for all purposes of such Option to be employment by the Company.
Notwithstanding the foregoing provisions, no Incentive Stock Option may be
exercised after its expiration date.
6.8. Non-Employee Director Options. Director Options shall be
automatic and subject to the following additional terms and conditions:
(a) All Director Options shall be Non-Qualified Stock
Options.
(b) Each Non-Employee Director shall be granted an
Initial Option to purchase 1,000 shares of Common Stock on the date of his or
her initial election to the Board of Directors, and an Annual Option to purchase
1,000 shares of Common Stock on the next business day following each annual
meeting of stockholders.
(c) The exercise price of each Director Option will be
100% of the Fair Market Value at the time of grant.
(d) Director Options shall become exercisable six months
after the time of grant. The exercise period shall not exceed ten years from the
date of grant, provided that subject to the provisions of Section 6.8(e), no
Director Option may be exercised more than 90 days after the optionee ceases to
serve as a director of the Company.
(e) if a Non-Employee Director dies or becomes disabled
becomes disabled (within the meaning of Section 22(e)(3) of the Code or any
successor provision thereto) while a director of the Company, the Option may be
exercised (to the extent otherwise exercisable on the date of disability or
death), by such disabled director or, in the case of death, by the director's
Designated Beneficiary, in each case within the period of one year after the
date of disability or death (or within such lesser period as may be specified in
the applicable Option agreement).
Section 7. Restricted And Unrestricted Stock.
7.1. General. The Board of Directors may grant Awards
entitling recipients to acquire shares of Common Stock, subject to the right of
the Company to repurchase all or part of such shares at their purchase price (or
to require forfeiture of such shares if purchased at no cost) from the recipient
in the event that conditions specified by the Administrator in the applicable
Award are not satisfied prior to the end of the applicable Restricted Period or
Restricted Periods established by the Administrator for such Award. Conditions
for repurchase (or forfeiture) may be
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based on continuing employment or service or achievement of pre-established
performance or other goals and objectives.
7.2. Restricted Stock. Shares of Restricted Stock may not be
sold, assigned, transferred, pledged or otherwise encumbered, except as
permitted by the Administrator, during the applicable Restricted Period. Shares
of Restricted Stock shall be evidenced in such manner as the Board of Directors
may determine. Any certificates issued in respect of shares of Restricted Stock
shall be registered in the name of the Participant and, unless otherwise
determined by the Board of Directors, deposited by the Participant, together
with a stock power endorsed in blank, with the Company (or its designee). At the
expiration of the Restricted Period, the Company (or such designee) shall
deliver such certificates to the Participant or, if the Participant has died, to
the Participant's Designated Beneficiary.
7.3. Unrestricted Stock. The Administrator may, in its sole
discretion, grant (or sell at a purchase price determined by the Board of
Directors, which shall not be lower than 85% of Fair Market Value on the date of
sale) Unrestricted Stock to Participants.
7.4. Payment. The purchase price for each share of Restricted
Stock and Unrestricted Stock shall be determined by the Administrator and may
not be less than the par value of the Common Stock. Such purchase price may be
paid in the form of past services or such other lawful consideration as is
determined by the Board of Directors.
7.5. Certificates. Stock certificates representing Shares of
Restricted Stock or Unrestricted Stock shall bear a legend referring to any
restrictions imposed thereon and such other matters as the Administrator may
determine.
7.6. Acceleration. The Administrator may at any time
accelerate the expiration of the Restricted Period applicable to all, or any
particular, outstanding shares of Restricted Stock.
Section 8. General Provisions Applicable to Awards.
8.1. Applicability of Rule 16b-3. Those provisions of the Plan
which make an 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, or
any successor provision, and then only with respect to Reporting Persons.
8.2. Documentation. Each Award under the Plan shall be
evidenced by an instrument delivered to the Participant specifying the terms and
conditions thereof and containing such other terms and conditions not
inconsistent with the provisions of the Plan as the Administrator considers
necessary or advisable. Such instruments may be in the form of agreements to be
executed by both the Company and the Participant, or certificates, letters or
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similar documents, acceptance of which will evidence agreement to the terms
thereof and of this Plan.
8.3. Administrator Discretion. Each type of Award may be made
alone, in addition to or in relation to any other type of Award. The terms of
each type of Award need not be identical, and the Administrator need not treat
Participants uniformly.
8.4. Termination of Status. Subject to the provisions of
Section 6, the Administrator shall determine the effect on an Award of the
disability, death, retirement, authorized leave of absence or other termination
of employment or other status of a Participant and the extent to which, and the
period during which, the Participant's legal representative, guardian or
Designated Beneficiary may exercise rights under such Award.
8.5. Mergers, Etc. In the event of a consolidation or merger
or sale of all or substantially all of the assets of the Company in which
outstanding shares of Common Stock are exchanged for securities, cash or other
property of any other corporation or business entity (an "Acquisition"), the
Board of Directors or the board of directors of any corporation assuming the
obligations of the Company, may, in its discretion, take any one or more of the
following actions as to outstanding Awards: (i) provide that such Awards shall
be assumed, or substantially equivalent Awards shall be substituted, by the
acquiring or succeeding corporation (or an affiliate thereof) on such terms as
the Board of Directors determines to be appropriate; (ii) upon written notice to
Participants, provide that all unexercised Options will terminate immediately
prior to the consummation of such transaction unless exercised by the
Participant within a specified period following the date of such notice; (iii)
in the event of an Acquisition under the terms of which holders of the Common
Stock of the Company will receive upon consummation thereof a cash payment for
each share surrendered in the Acquisition (the "Acquisition Price"), make or
provide for a cash payment to Participants equal to the difference between (A)
the Acquisition Price times the number of shares of Common Stock subject to
outstanding Options (to the extent then exercisable at prices not in excess of
the Acquisition Price) and (B) the aggregate exercise price of all such
outstanding Options in exchange for the termination of such Options; and (iv)
provide that all or any outstanding Awards shall become exercisable or
realizable in full prior to the effective date of such Acquisition.
8.6. Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, to the extent that an Option has not
been previously exercised, it will terminate immediately prior to the
consummation of such proposed action. The Board of Directors may, in the
exercise of its sole discretion in such instances, declare that any Award shall
terminate as of a date fixed by the Board of Directors and give each Participant
the right to exercise his or her Option as to all or any of the shares subject
thereto, including shares as to which the Option would not otherwise be
exercisable, or may accelerate the termination of the Restricted Period of any
Stock Award.
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8.7. Withholding. The Participant shall pay to the Company, or
make provision satisfactory to the Administrator for payment of, any taxes
required by law to be withheld in respect of Awards under the Plan no later than
the date of the event creating the tax liability. In the Administrator's
discretion, and subject to such conditions as the Administrator may establish,
such tax obligations may be paid in whole or in part in shares of Common Stock,
including shares retained from the Award creating the tax obligation, valued at
their Fair Market Value. The Company may, to the extent permitted by law, deduct
any such tax obligations from any payment of any kind otherwise due to the
Participant.
8.8. Foreign Nationals. Awards may be made to Participants who
are foreign nationals or employed outside the United States on such terms and
conditions different from those specified in the Plan as the Administrator
considers necessary or advisable to achieve the purposes of the Plan or comply
with applicable laws.
8.9. Amendment of Award. The Board of Directors may amend,
modify or terminate any outstanding Award, including substituting therefor
another Award of the same or a different type, changing the date of exercise or
realization and converting an Incentive Stock Option to a Non-Qualified Stock
Option; provided that the Participant's consent to such action shall be required
unless the Board of Directors determines that the action, taking into account
any related action, would not materially and adversely affect the Participant.
8.10. Conditions on Delivery of Common Stock. The Company will
not be obligated to deliver any shares of Common Stock pursuant to the Plan or
to remove restrictions from shares previously delivered under the Plan (i) until
all conditions of the Award have been satisfied or removed; (ii) until, in the
opinion of the Company's counsel, all applicable federal and state laws and
regulations have been complied with; (iii) if the outstanding Common Stock is at
the time listed on any stock exchange or admitted for trading on an automatic
quotation system, until the shares to be delivered have been listed or
authorized to be listed or quoted on such exchange or quotation system upon
official notice of notice of issuance; and (iv) until all other legal matters in
connection with the issuance and delivery of such shares have been approved by
the Company's counsel. If the sale of Common Stock has not been registered under
the Securities Act of 1933, as amended, the Company may require, as a condition
to exercise of the Award, such representations or agreements as the Company may
consider appropriate to avoid violation of such act and may require that the
certificates evidencing such Common Stock bear an appropriate legend restricting
transfer.
Section 9. Miscellaneous
9.1. No Right To Employment or Other Status. The grant of an
Award shall not be construed as giving a Participant the right to continued
employment or service for the Company. The Company expressly reserves the right
at any time to dismiss a Participant free from any liability or claim under the
Plan, except as expressly provided in the applicable Award.
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9.2. No Rights As Stockholder. Subject to the provisions of
the applicable Award, no Participant or Designated Beneficiary shall have any
rights as a stockholder with respect to any shares of Common Stock to be
distributed under the Plan until he or she becomes the record holder thereof.
9.3. Exclusion from Benefit Computations. No amounts payable
upon exercise of Awards granted under the Plan shall be considered salary, wages
or compensation to Participants for purposes of determining the amount or nature
of benefits that Participants are entitled to under any insurance, retirement or
other benefit plans or programs of the Company.
9.4. Inability to Obtain Authority. The inability of the
Company to obtain authority from any regulatory body having jurisdiction, which
authority is deemed by the Company's counsel to be necessary to the lawful
issuance and sale of any shares hereunder, shall relieve the Company of any
liability in respect of the failure to issue or sell such shares as to which
such requisite authority shall not have been obtained.
9.5. Grants Exceeding Allotted Shares. If the shares of Common
Stock covered by an Award exceeds, as of the date of grant, the number of Shares
which may be issued under the Plan without additional shareholder approval, such
Award shall be void with respect to such excess stock, unless such additional
shareholder approval is obtained in a timely manner.
9.6. Effective Date and Term.
(i) Effective Date. The Plan shall become effective on
July , 1998, the date of its adoption 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 of Director'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 under the Plan. Amendments to the Plan
not requiring stockholder approval shall become effective when adopted by the
Board of Directors; amendments requiring stockholder approval 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 Company's stockholders. If such stockholder
approval is not obtained within twelve months of the Board of Director'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 the limitations set forth in this Section 9(d), Awards may
be made under the Plan at any time after the effective date and before the date
fixed for termination of the Plan.
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(ii) Termination. 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, (ii) the date
on which all shares available for issuance under the Plan shall have been issued
pursuant to Awards under the Plan, or (iii) by action of the Board of Directors.
No Award may be granted hereunder after termination of the Plan. The termination
or amendment of the Plan shall not alter or impair any rights or obligations
under theretofore granted under the Plan.
9.7. Amendment of Plan. The Board of Directors may amend,
suspend or terminate the Plan or any portion thereof at any time; provided that
no amendment shall be made without stockholder approval if such approval is
necessary to comply with any applicable tax or regulatory requirement. Prior to
any such approval, Awards may be made under the Plan expressly subject to such
approval.
9.8. Governing Law. The provisions of the Plan shall be
governed by and interpreted in accordance with the laws of the State of
Delaware.
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