Exhibit 4.1
1992 STOCK OPTION PLAN
MAGNA-LAB INC.
1. Purpose of the Plan.
The purpose of the Magna-Lab Inc. 1992 Stock Option Plan (the "Plan") is
to promote the interests of Magna-Lab Inc., a New York corporation (the
"Company") and its shareholders by strengthening the Company's ability to
attract and retain competent employees, to make service on the Board of
Directors of the Company more attractive to present and prospective non-employee
directors of the Company and to provide a means to encourage stock ownership and
proprietary interest in the Company by officers, non-employee directors and
valued employees and other individuals upon whose judgment, initiative, and
efforts the financial success and growth of the Company largely depend. This
Plan and the grant of any option or stock appreciation right hereunder shall be
effective upon approval by the Board of Directors and shareholders of the
Company.
2. Stock Subject to the Plan.
(a) The total number of shares of the authorized but unissued or
treasury shares of the Class A Common Stock, $.001 par value per share, of the
Company ("Common Stock") for which options and stock appreciation rights
("SARs") may be granted under the Plan shall be 14,000,000, subject to
adjustment as provided in Section 14 hereof.
(b) If an option granted or assumed hereunder shall expire or
terminate for any reason without having been exercised in full, the unpurchased
shares subject thereto shall again be available for subsequent option grants
under the Plan, provided, however, that shares as to which an option has been
surrendered in connection with the exercise of a related SAR will not again be
available for subsequent option or SAR grants under the Plan.
(c) Stock issuable upon exercise of an option or SAR granted under
the Plan may be subject to such restrictions on transfer, repurchase rights or
other restrictions as shall be determined by the Board of Directors.
3. Administration of the Plan.
(a) The Plan shall be administered by the Board of Directors of the
Company (the "Board"). No member of the Board shall act upon any matter
exclusively affecting any option or SAR granted or to be granted to himself or
herself under the Plan. The decision of the Board as to all questions of
interpretation and application of the Plan shall be final, binding and
conclusive on all persons. The Board may, in its sole discretion, grant options
to purchase shares of the Company's Common Stock, grant SAR's and issue shares
upon exercise of such options and SAR's, as provided in the Plan. The Board
shall have authority, subject to the express provisions of the Plan, to construe
the respective option and SAR 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 or SAR agreements, which may but need not be
identical, and to make all other determinations in the judgment of the Board
necessary or desirable for the administration of the Plan. The Board 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 shall be the sole and final judge of such
expediency. No director shall be liable for any action or determination made in
good faith. The Board may, in its discretion, delegate its power, duties and
responsibilities to a committee, consisting of two or more members of the Board,
all of whom are "disinterested
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persons" (as hereinafter defined). If a committee is so appointed, all
references to the Board herein shall mean and relate to such committee, unless
the context otherwise requires. For the purposes of the Plan, a director or
member of such committee shall be deemed to be "disinterested" only if such
person qualified as a "disinterested person" within the meaning of paragraph
(c)(2) of Rule 16b-3 promulgated under the Securities Exchange Act of 1934, as
amended ("Exchange Act"), as such term is interpreted from time to time.
4. Type of Options.
Options granted pursuant to the Plan shall be authorized by action of the
Board (or a committee designated by the Board) and may be designated as either
incentive stock options meeting the requirements of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), or non-qualified options which
are not intended to meet the requirements of such Section 422 of the Code, the
designation to be in the sole discretion of the Board. Options designated as
incentive stock options that fail to continue to meet the requirements of
Section 422 of the Code shall be redesignated as non-qualified options
automatically on the date of such failure to continue to meet the requirements
of Section 422 of the Code without further action by the Board.
5. Eligibility.
Options designated as incentive stock options may be granted only to
officers and key employees of the Company or of any subsidiary corporation
(herein called "subsidiary" or "subsidiaries"), as defined in Section 424 of the
Code and the Treasury Regulations promulgated thereunder (the "Regulations").
Directors who are not otherwise employees of the Company or a subsidiary shall
not be eligible to be granted incentive stock options pursuant to the Plan. SARs
and options designated as non-qualified options may be granted to (i) officers
and key employees of the Company or of any of its subsidiaries, or (ii) agents,
medical advisors and directors of and consultants to the Company, whether or not
otherwise employees of the Company.
In determining the eligibility of an individual to be granted an option or
SAR, as well as in determining the number of shares to be optioned to any
individual, the Board shall take into account the position and responsibilities
of the individual being considered, the nature and value to the Company or its
subsidiaries of his or her service and accomplishments, his or her present and
potential contribution to the success of the Company or its subsidiaries, and
such other factors as the Board may deem relevant.
6. Restrictions on Incentive Stock Options.
Incentive stock options (but not non-qualified options) granted under this
Plan shall be subject to the following restrictions:
(a) Limitation on Number of Shares. Ordinarily, the aggregate fair
market value of the shares of Common Stock with respect to which incentive stock
options are granted, (determined as of the date the incentive stock options are
granted), exercisable for the first time by an individual during any calendar
year shall not exceed $100,000. If an incentive stock option is granted pursuant
to which the aggregate fair market value of shares with respect to which it
first becomes exercisable in any calendar year by an individual exceeds such
$100,000 limitation, the portion of such option which is in excess of the
$100,000 limitation, and any such options issued subsequently in the same
calendar year, shall be treated as a non-qualified option pursuant to Section
422(d)(1) of the Code. In the event that an individual is eligible to
participate in any other stock option plan of the Company or any parent or
subsidiary of the Company which is also intended to comply with the provisions
of Section 422 of the Code, such $100,000 limitation shall apply to the
aggregate number of shares for which incentive stock options may be granted
under this Plan and all such other plans.
(b) Ten Percent (10%) Shareholder. If any employee to whom an
incentive stock option is granted pursuant to the provisions of this Plan is on
the date of grant the owner of stock (as determined under Section 424(d) of the
Code) possessing more than 10% of the total combined voting power of all classes
of stock of the Company or any parent or subsidiary of the Company, then the
following special provisions shall be applicable to the incentive stock options
granted to such individual:
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(i) The option price per share subject to such incentive
stock options shall be not less than 110% of the fair
market value of the stock determined at the time such
option was granted. In determining the fair market value
under this clause (i), the provisions of Section 8
hereof shall apply.
(ii) The incentive stock option shall have a term expiring
not more than five (5) years from the date of the
granting thereof.
7. Option Agreement.
Each option and SAR shall be evidenced by an agreement (the "Agreement")
duly executed on behalf of the Company and by the grantee to whom such option or
SAR is granted, which Agreement shall comply with and be subject to the terms
and conditions of the Plan. The Agreement may contain such other terms,
provisions and conditions which are not inconsistent with the Plan as may be
determined by the Board, provided that options designated as incentive stock
options shall meet all of the conditions for incentive stock options as defined
in Section 422 of the Code. No option or SAR shall be granted within the meaning
of the Plan and no purported grant of any option or SAR shall be effective until
the Agreement shall have been duly executed on behalf of the Company and the
optionee. More than one option and SAR may be granted to an individual.
8. Option Price.
(a) Subject to the conditions set forth in Section 8(d) hereof, the
option price or prices of shares of the Company's Common Stock for options
designated as non-qualified stock options shall be as determined by the Board.
(b) Subject to the conditions set forth in Sections 8(d) and 6(b)
hereof, the option price or prices of shares of the Company's Common Stock for
incentive stock options shall be at least the fair market value of such Common
Stock at the time the option is granted as determined by the Board in accordance
with the Regulations promulgated under Section 422 of the Code.
(c) If shares of the Company's Common Stock are then listed on any
national securities exchange, the fair market value shall be the mean between
the high and low sales prices, if any, on the largest such exchange on the date
of the grant of the option or, if none, shall be determined by taking a weighted
average of the mean between the highest and lowest sales on the nearest date
before and the nearest date after the date of grant in accordance with Treasury
Regulations Section 25.2512-2. If the shares are not then listed on any such
exchange, the fair market value of such shares shall be the mean between the
closing "Bid" and the closing "Ask" prices, if any, as reported in the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") for the
date of the grant of the option, or, if none, shall be determined by taking a
weighted average of the means between the highest and lowest sales on the
nearest date before and the nearest date after the date of grant in accordance
with Treasury Regulations Section 25.2512-2. If the shares are not then either
listed on any such exchange or quoted in NASDAQ, the fair market value shall be
the mean between the average of the "Bid" National Daily Quotation Service for
the date of the grant of the option, or, if none, shall be determined by taking
a weighted average of the means between the highest and lowest sales on the
nearest date before and the nearest date after the date of grant in accordance
with Treasury Regulations Section 25.2512-2. If the fair market value cannot be
determined under the preceding three sentences, it shall be determined in good
faith by the Board.
(d) Prior to the effective date of the Company's contemplated
initial public offering, the Company may not grant options to purchase more than
142,500 shares of Common Stock. Such options, if any, so granted must be granted
at an exercise price per share of not less than the per share initial public
offering price of the Common Stock (without giving any value to warrants which
may be issued in conjunction with Common Stock in such initial public offering).
"Initial public offering" means an underwritten public offering on a firm
commitment basis pursuant to an effective registration statement under the
Securities Act of 1933, as amended ("1933 Act"), covering the offer and sale of
equity securities of and for the account of the Company.
9. Manner of Payment; Manner of Exercise.
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(a) Options granted under the Plan may provide for the payment of
the exercise price by delivery of (i) cash or a check payable to the order of
the Company in an amount equal to the exercise price of such options, (ii)
shares of any class of common stock of the Company owned by the optionee having
a fair market value equal in amount to the exercise price of the options being
exercised, or (iii) any combination of (i) and (ii), provided, however, that
payment of the exercise price by delivery of shares of common stock of the
Company owned by such optionee may be made only upon the condition that such
payment does not result in a charge to earnings for financial accounting
purposes as determined by the Board, unless such condition is waived by the
Board. The fair market value of any shares of the Company's common stock which
may be delivered upon exercise of an option shall be determined by the Board in
accordance with Section 8 hereof.
(b) To the extent that the right to purchase shares under an option
has accrued and is in effect, options may be exercised in full at one time or in
part from time to time, by giving written notice, signed by the person or
persons exercising the option, to the Company, stating the number of shares with
respect to which the option is being exercised, accompanied by payment in full
for such shares as provided in subparagraph (a) above. Upon such exercise,
delivery of a certificate for paid-up non-assessable shares shall be made at the
principal office of the Company to the person or persons exercising the option
at such time, during ordinary business hours, after thirty (30) days but not
more than ninety (90) days from the date of receipt of the notice by the
Company, as shall be designated in such notice, or at such time, place and
manner as may be agreed upon by the Company and the person or persons exercising
the option.
10. Exercise of Options and SARs.
Each option and SAR granted under the Plan shall, subject to Section 11(b)
and Section 13 hereof, be exercisable at such time or times and during such
period as shall be set forth in the Agreement; provided, however, that no option
or SAR granted under the Plan shall have a term in excess of ten (10) years from
the date of grant. To the extent that an option or SAR is not exercised when it
becomes initially exercisable, it shall not expire but shall be carried forward
and shall be exercisable, on a cumulative basis, until the expiration of the
exercise period. No partial exercise may be made for less than one hundred (100)
full shares of Common Stock. The exercise of an option shall result in the
cancellation of the SAR to which it relates with respect to the same number of
shares of Common Stock as to which the option was exercised.
11. Term of Options and SARs; Exercisability.
(a) Term.
(i) Each option shall expire not more than ten (10) years from the
date of the granting thereof, except as (a) otherwise provided
pursuant to the provisions of Section 6(b) hereof, and (b)
earlier termination as herein provided.
(ii) Except as otherwise provided in this Section 11, an option or
SAR granted to any grantee who ceases to perform services for
the Company or one of its subsidiaries shall terminate on the
earlier of the last day of the third month or ninety days
after the date such grantee ceases to perform services for the
Company or one of its subsidiaries, or on the date on which
the option or SAR expires by its terms, whichever occurs
first.
(iii) If the grantee ceases to perform services for the Company
because of dismissal for cause or because the grantee is in
breach of any employment agreement, such option or SAR will
terminate on the date the grantee ceases to perform services
for the Company or one of its subsidiaries.
(iv) If the grantee ceases to perform services for the Company
because the grantee has become permanently disabled (within
the meaning of Section 22(e)(3) of the Code), such option or
SAR shall terminate on the last day of the twelfth month from
the date such grantee ceases to perform services for the
Company, or on the date on which the option or SAR expires by
its terms, whichever occurs first.
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(v) In the event of the death of any grantee, any option or SAR
granted to such grantee shall terminate on the last day of the
twelfth month from the date of death, or on the date on which
the option or SAR expires by its terms, whichever occurs
first.
(b) Exercisability.
(i) Except as provided below, an option or SAR granted to a
grantee who ceases to perform services for the Company or one
of its subsidiaries shall be exercisable only to the extent
that such option or SAR has accrued and is in effect on the
date such grantee ceases to perform services for the Company
or one of its subsidiaries.
(ii) An option or SAR granted to a grantee who ceases to perform
services for the Company or one of its subsidiaries because he
or she has become permanently disabled, as defined above,
shall be exercisable with respect to the full number of shares
covered by such option or SAR.
(iii) In the event of the death of any grantee, the option or SAR
granted to such grantee may be exercised with respect to the
full number of shares covered thereby, whether or not under
the provisions of Section 10 hereof the grantee was entitled
to do so at the date of his or her death, by the estate of
such grantee, or by any person or persons who acquired the
right to exercise such option or SAR by bequest or inheritance
or by reason of the death of such grantee.
12. Options Not Transferable.
The right of any grantee to exercise any option or SAR granted to him or
her shall not be assignable or transferable by such grantee other than by will
or the laws of descent and distribution or pursuant to a domestic relations
order as defined in the Code or Title 1 of the Employee Retirement Income
Security Act, or the rules thereunder, and any such option or SAR shall be
exercisable during the lifetime of such grantee only by him. Any option or SAR
granted under the Plan shall be null and void and without effect upon the
bankruptcy of the grantee to whom the option is granted, or upon any attempted
assignment or transfer, except as herein provided, including without limitation,
any purported assignment, whether voluntary or by operation of law, pledge,
hypothecation or other disposition, attachment, trustee process or similar
process, whether legal or equitable, upon such option or SAR.
13. Terms and Conditions of SARs.
(a) An SAR may be granted separately or in connection with an option
(either at the time of grant or at any time during the term of the option).
(b) The exercise of an SAR shall result in the cancellation of the
option to which it relates with respect to the same number of shares of Common
Stock as to which the SAR was exercised.
(c) An SAR granted in connection with an option shall be exercisable
or transferable only to the extent that such related option is exercisable or
transferable.
(d) Upon the exercise of an SAR related to an option, the holder
will be entitled to receive payment of an amount determined by multiplying
(i) The difference obtained by subtracting the purchase price
of a share of Common Stock specified in the related option from the fair market
value of a share of Common Stock on the date of exercise of such SAR (as
determined by the Board of Directors), by
(ii) The number of shares as to which such SAR is exercised.
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(e) An SAR granted without relationship to an option shall be
exercisable as determined by the Board of Directors, but in no event after ten
years from the date of grant.
(f) An SAR granted without relationship to an option will entitle
the holder, upon exercise of the SAR, to receive payment of an amount determined
by multiplying:
(i) The difference obtained by subtracting the fair market
value of a share of Common Stock on the date the SAR was granted (which for the
six month period following the effective date of the initial public offering
shall not be less than the per share initial public offering price of the Common
Stock (without giving any value to warrants which may be issued in conjunction
with Common Stock in the initial public offering), from the fair market value of
a share of Common Stock on the date of exercise of such SAR (as determined by
the Board), by
(ii) The number of shares as to which such SAR is exercised.
(g) Notwithstanding subsections (d) and (f) above, the Board may
limit the amount payable upon exercise of an SAR. Any such limitation shall be
determined as of the date of grant and noted on the instrument evidencing the
SAR granted.
(h) At the discretion of the Board, payment of the amount determined
under subsections (d) and (f) above may be made solely in whole shares of Common
Stock valued at their fair market value on the date of exercise of the SAR (as
determined by the Board), or solely in cash, or in a combination of cash and
shares. If the Board decides to make full payment in shares of Common Stock and
the amount payable results in a fractional share, payment for the fractional
share shall be made in cash.
(i) Neither an SAR nor an option granted in connection with an SAR
granted to a person subject to Section 16(b) of the Act may be exercised before
six months after the date of grant.
14. Recapitalization, Reorganizations and the Like.
In the event that the outstanding shares of the Common Stock of the
Company are changed into or exchanged for a different number or kind of shares
or other securities of the Company or of another corporation by reason of any
reorganization, merger, consolidation, recapitalization, reclassification, stock
split-up, combination of shares, or dividends payable in capital stock,
appropriate adjustment shall be made in the number and kind of shares as to
which options and SARs may be granted under the Plan and as to which outstanding
options and SARs or portions thereof then unexercised shall be exercisable, to
the end that the proportionate interest of the grantee shall be maintained as
before the occurrence of such event; such adjustment in outstanding options and
SARs shall be made without change in the total price applicable to the
unexercised portion of such options and SARs and with a corresponding adjustment
in the exercise price per share.
In addition, unless otherwise determined by the Board in its sole
discretion, in the case of any (i) sale or conveyance to another entity of all
or substantially all of the property and assets of the Company or (ii) Change in
Control (as hereinafter defined) of the Company, the purchaser(s) of the
Company's assets or stock may, in his, her or its discretion, deliver to the
optionee the same kind of consideration that is delivered to the shareholders of
the Company as a result of such sale, conveyance or Change in Control, or the
Board may cancel all outstanding options and SARs in exchange for consideration
in cash or in kind which consideration in both cases shall be equal in value to
the value of those shares of stock or other securities the optionee would have
received had the option been exercised (to the extent then exercisable) and no
disposition of the shares acquired upon such exercise been made prior to such
sale, conveyance or Change in Control, less the exercise price therefor. Upon
receipt of such consideration, the options and SARs shall immediately terminate
and be of no further force and effect. The value of the stock or other
securities the grantee would have received if the option had been exercised
shall be determined in good faith by the Board of the Company, and in the case
of shares of the Common Stock of the Company, in accordance with the provisions
of Section 8 hereof.
The Board shall also have the power and right to accelerate the
exercisability of any options or SARs, notwithstanding any limitations in this
Plan or in the Agreement upon such a sale, conveyance or Change in Control.
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Upon such acceleration, any options or portion thereof originally designated as
incentive stock options that no longer qualify as incentive stock options under
Section 422 of the Code as a result of such acceleration shall be redesignated
as non-qualified stock options.
A "Change in Control" shall be deemed to have occurred if any person, or
any two or more persons acting as a group, and all affiliates of such person or
persons, who prior to such time owned less than fifty percent (50%) of the then
outstanding Common Stock of the Company, shall acquire such additional shares of
the Company's Common Stock in one or more transactions, or series of
transactions, such that following such transaction or transactions, such person
or group and affiliates beneficially own fifty percent (50%) or more of the
Company's Common Stock outstanding.
Upon dissolution or liquidation of the Company, all options and SARs
granted under this Plan shall terminate, but each grantee (if at such time in
the employ of or otherwise associated with the Company or any of its
subsidiaries) shall have the right, immediately prior to such dissolution or
liquidation, to exercise his or her option or SAR to the extent then
exercisable.
If by reason of a corporate merger, consolidation, acquisition of property
or stock, separation, reorganization, or liquidation, the Board shall authorize
the issuance or assumption of a stock option or stock options in a transaction
to which Section 424(a) of the Code applies, then, notwithstanding any other
provision of the Plan, the Board may grant an option or options upon such terms
and conditions as it may deem appropriate for the purpose of assumption of the
old option, or substitution of a new option for the old option, in conformity
with the provisions of such Section 424(a) of the Code and the Regulations
thereunder, and any such option shall not reduce the number of shares otherwise
available for issuance under the Plan.
No fraction of a share shall be purchasable or deliverable upon the
exercise of any option or SAR, but in the event of any adjustment hereunder in
the number of shares covered by the option or SAR shall cause such number to
include a fraction of a share, such fraction shall be adjusted to the nearest
smaller whole number of shares.
15. No Special Employment Rights.
Nothing contained in the Plan or in any option or SAR granted under the
Plan shall confer upon any grantee any right with respect to the continuation of
his or her employment by the Company (or any subsidiary) or interfere in any way
with the right of the Company (or any subsidiary), subject to the terms of any
separate employment agreement to the contrary, at any time to terminate such
employment or to increase or decrease the compensation of the grantee from the
rate in existence at the time of the grant of an option or SAR. Whether an
authorized leave of absence, or absence in military or government service, shall
constitute termination of employment shall be determined by the Board at the
time.
16. Withholding.
The Company's obligation to deliver shares upon the exercise of any
non-qualified option or SAR granted under the Plan shall be subject to the
option holder's satisfaction of all applicable Federal, state and local income
and employment tax withholding requirements. The Company and optionee may agree
to withhold shares of Common Stock purchased upon exercise of an option or SAR
to satisfy the above-mentioned withholding requirements; provided, however, no
such agreement may be made by a grantee who is an "officer" or "director" within
the meaning of Section 16 of the Exchange Act, except pursuant to a standing
election to so withhold shares of Common Stock purchased upon exercise of an
option, such election to be made not less than six months prior to such exercise
and which election may be revoked only upon six months prior written notice.
17. Restrictions on Issuance of Shares.
(a) Notwithstanding the provisions of Section 9, the Company may
delay the issuance of shares covered by the exercise of an option or SAR and the
delivery of a certificate for such shares until one of the following conditions
shall be satisfied:
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(i) The shares with respect to which such option or SAR has been
exercised are at the time of the issue of such shares
effectively registered or qualified under applicable Federal
and state securities acts now in force or as hereafter
amended; or
(ii) Counsel for the Company shall have given an opinion, which
opinion shall not be unreasonably conditioned or withheld,
that such shares are exempt from registration and
qualification under applicable Federal and state securities
acts now in force or as hereafter amended.
(b) It is intended that all exercises of option and SARs shall be
effective, and the Company shall use its best efforts to bring about compliance
with the above conditions within a reasonable time, except that the Company
shall be under no obligation to qualify shares or to cause a registration
statement or a post-effective amendment to any registration statement to be
prepared for the purpose of covering the issue of shares in respect of which any
option may be exercised, except as otherwise agreed to by the Company in
writing.
18. Purchase for Investment; Rights of Holder on Subsequent Registration.
Unless the shares to be issued upon exercise of an option or SAR granted
under the Plan have been effectively registered under the 1933 Act, as now in
force or hereafter amended, the Company shall be under no obligation to issue
any shares covered by any option or SAR unless the person who exercises such
option, in whole or in part, shall give a written representation and undertaking
to the Company which is satisfactory in form and scope to counsel for the
Company and upon which, in the opinion of such counsel, the Company may
reasonably rely, that he or she is acquiring the shares issued pursuant to such
exercise of the option or SAR for his or her own account as an investment and
not with a view to, or for sale in connection with, the distribution of any such
shares, and that he or she will make no transfer of the same except in
compliance with any rules and regulations in force at the time of such transfer
under the 1933 Act, or any other applicable law, and that if shares are issued
without such registration, a legend to this effect may be endorsed upon the
securities so issued.
In the event that the Company shall, nevertheless, deem it necessary or
desirable to register under the 1933 Act or other applicable statutes any shares
with respect to which an option or SAR shall have been exercised, or to qualify
any such shares for exemption from the 1933 Act or other applicable statutes,
then the Company may take such action and may require from each grantee such
information in writing for use in any registration statement, supplementary
registration statement, prospectus, preliminary prospectus or offering circular
as is reasonably necessary for such purpose and may require reasonable indemnity
to the Company and its officers and directors from such holder against all
losses, claims, damages and liabilities arising from such use of the information
so furnished and caused by any untrue statement of any material fact therein or
caused by the omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made.
19. Loans.
At the discretion of the Board, the Company may loan to the optionee some
or all of the purchase price of the shares acquired upon exercise of an option
granted under the Plan.
20. Modification of Outstanding Options and SARs.
Subject to limitations contained herein, the Board may authorize the
amendment of any outstanding option or SAR with the consent of the grantee when
and subject to such conditions as are deemed to be in the best interests of the
Company and in accordance with the purposes of the Plan.
21. Approval of Shareholders.
The Plan shall be subject to approval by the vote of shareholders holding
at least a majority of the voting stock of the Company voting in person or by
proxy at a duly held shareholders' meeting, or by written consent of
shareholders in accordance with the laws of the State of New York, within twelve
(12) months after the adoption of the Plan by the Board and shall take effect as
of the date set forth in Section 1. The Board may grant options and
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SARs under the Plan prior to such approval, but any such option shall become
effective as of the date of grant only upon such approval and, accordingly, no
such option may be exercisable prior to such approval.
22. Termination and Amendment of Plan.
Unless sooner terminated as herein provided, the Plan shall terminate ten
(10) years from the effective date of the Plan, which shall be the date the Plan
is duly adopted by the Board and approved by the shareholders of the Company.
The Board may at any time terminate the Plan or make such modification or
amendment thereof as it deems advisable; provided, however, (i) the Board may
not, without the approval of the shareholders of the Company obtained in the
manner stated in Section 21, increase the maximum number of shares for which
options and SARs may be granted or change the designation of the class of
persons eligible to receive options and SARs under the Plan, and (ii) any such
modification or amendment of the Plan shall be approved by a majority of the
shareholders of the Company to the extent that such stockholder approval is
necessary to comply with applicable provisions of the Code, rules promulgated
pursuant to Section 16 of the Exchange Act, applicable state law, or applicable
NASD or exchange listing requirements. Termination or any modification or
amendment of the Plan shall not, without the consent of an optionee, affect his
or her rights under an option or SAR theretofore granted to him or her.
23. Limitation of Rights in the Underlying Shares.
A holder of an option or SAR shall not be deemed for any purpose to be a
stockholder of the Company with respect to such option or SAR except to the
extent that such option or SAR shall have been exercised with respect thereto
and, in addition, a stock certificate shall have been issued theretofore and
delivered to the holder.
24. Notices.
Any communication or notice required or permitted to be given under the
Plan shall be in writing, and mailed by registered or certified mail or
delivered by hand, if to the Company, to its principal place of business's
attention: President, and, if to the holder of an option or SAR, to the address
as appearing on the records of the Company.
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