Exhibit 4
CHELL CORPORATION
STOCK OPTION PLAN
1. Introduction
A. This Plan shall be known as the "Chell Corporation Stock Option
Plan" (the "Plan") of Chell Corporation, a New York corporation (the "Company").
The purpose of this Plan is to provide a method to give incentive to those
persons or entities who, in the sole and absolute discretion of the Board of
Directors of the Company (the "Board"), are responsible for the management,
growth and/or protection of the business of the Company and who are making and
can continue to make substantial contributions to the success of the Company's
business including, but not limited to, present and future officers, directors,
employees, consultants and professional advisors of the Company or any future
Parent (hereinafter defined) or Subsidiary (hereinafter defined) of the Company.
It is anticipated that the Plan will encourage such persons and entities to
acquire capital stock ownership in the Company, thus giving them a proprietary
interest, or increasing their proprietary interest, in the Company, providing
them with greater incentive to make and continue to make substantial
contributions to the success of the Company's business, and encourage them to
continue in the service of, and promote the interests of, the Company and all of
its stockholders. Accordingly, the Company periodically will grant to such
persons and entities as may be selected as hereinafter provided, options (each
an "Option") to purchase shares of Common Stock, par value $.0467 (the "Common
Stock") of the Company, subject to the terms and conditions which are
hereinafter provided. .
B. All Incentive Stock Options "ISOs" (as hereinafter defined) which
the Board, in its sole and absolute discretion, desires to grant, must be
granted on or before the tenth (10th) annual anniversary date after the earlier
to occur of (i) the date when this Plan is adopted by the Board or (ii) the date
when this plan is approved by the Stockholders of the Company (which date shall
be set forth on the last page of this Plan).
C. ISOs are options which qualify pursuant to Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"). An Option which is
granted under this Plan, which is not an ISO, shall be a "Non-Qualified Option".
The Compensation Committee may determine whether options which are granted to
employees or non-employees shall be ISOs or Non Qualified Options subject to
compliance with applicable laws. Anyone who is not an employee of the Company
may only be granted Non-Qualified Options.
D. The terms "Subsidiary," "Subsidiaries" and "Parent" shall have
the same meaning as contained in Section 425 of the Code or under the section or
sections of any future law which is in effect when any relevant event occurs and
which covers the subject matter of said Code section.
2. Administration of the Plan
A. This Plan shall be administered by a Compensation Committee (the
"Compensation Committee") of not less than two (2) persons who shall be
appointed by, and serve at the pleasure of the Board and shall only consist of
non-employee directors of the Company. The term "Plan Administrators" shall mean
the Compensation Committee. To the extent necessary to comply with Rule 16b-3
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), determinations concerning Options granted to any person who is subject to
Section 16(b) of the Exchange Act shall be made by the Compensation Committee,
all of whose members shall be "disinterested persons" within the meaning of Rule
16b-3 under the Exchange Act. The Committee may delegate to officers or
employees of the Company or any Subsidiary, the authority, subject to such terms
as the Committee may determine, to perform administrative functions and, with
respect to persons not subject to Section 16 of the Exchange Act, to perform
such other functions as the Committee may determine, to the extent permitted
under Rule 16b-3, if applicable, and other applicable laws.
B. For purposes of administrating this Plan, a majority of the
Compensation Committee must be present at a meeting and shall constitute a
quorum and acts of a majority of a quorum at a meeting shall be required to be
deemed the acts of the Compensation Committee. In lieu of a meeting, the
Compensation Committee may also act by an instrument which is signed by a
majority of the Compensation Committee.
C. Subject to the provisions hereof, the Compensation Committee
shall:
i. select the persons or entities (each a "Grantee") to
whom, and the times at which, Options shall be granted;
ii. determine the number of shares subject to each Option
and its terms;
iii. prescribe the form (which shall be consistent herewith)
of the instruments evidencing Options which are granted
hereunder, which instruments may vary from one another
and may be amended periodically as the Compensation
Committee shall deem appropriate;
iv. prescribe rules and regulations periodically for
implementing this Plan as it may deem advisable,
including, but not limited to, such rules and
regulations as it shall deem advisable so that
transactions involving Options may qualify for exemption
from Section 16(b) of the Exchange Act under such rules
and regulations as the Securities and Exchange
Commission may promulgate periodically exempting
transactions from Section 16(b) and;
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v. decide every question about the interpretation or
application of any provision of this Plan or of any
instrument evidencing any Option which is granted under
this Plan.
D. If any portion of an employee's ISO first vests during any single
calendar year (under all plans of the Company, its Parent and all Subsidiaries
if such plan meets the qualification for an ISO under Section 422 of the Code
requirements) for shares of Common Stock which have an aggregate fair market
value (determined as provided in Article "5" of this Plan)(determined at the
time the Options are granted) which exceed $100,000 (the "$100,000 limitation"),
any amount in excess of the $100,000 limitation will not qualify under the Code
and shall be treated as a Non-qualified Stock Option. The $100,000 limitation
shall be applied by taking Options into account in the order in which such
Options were granted. For example, if options having an aggregate fair market
value of $50,000 are exercisable in 1998 and Options having an aggregate fair
market value of $100,000 first become exercisable in 1999, Options having an
aggregate fair market value of $150,000 can be exercised in 1999. To the extent
that the aggregate fair market value of stock for which ISO's are exercisable
for the first time during any calendar year (under all plans of the Company, its
Parent and all Subsidiaries) exceeds the $100,000 limitation, the amount of such
Options in excess of the $100,000 limitation shall constitute "Non-Qualified"
options. If the Code is amended either to increase or decrease the $100,000
limitation and if said amendment is applicable hereto, then the $100,000
limitation shall be deemed to be amended by such amount.
E. Determinations of the Plan Administrators, if any, shall be
reported to the Board at its next meeting following the determination; provided
however, that the failure to so report shall not affect any prior valid grant of
Options by the Compensation Committee. The Company shall implement the grant of
Options hereunder, pursuant to determinations of the Compensation Committee, by
the execution of instruments in such form as are approved by the Compensation
Committee.
F. ISOs and Non-Qualified Options shall be evidenced by an option
agreement (the "Option Agreement"). Each Option Agreement shall be signed by the
Company and the grantee of the Option (the "Grantee") and shall be in such form
as the Compensation Committee in its sole and absolute discretion, periodically
shall designate. The Option Agreement shall state that the Options have been
granted subject to the terms of this Plan as a condition pursuant to which the
Options have been granted and received and may contain such additional
provisions and restrictions as may be approved by the Compensation Committee;
provided, however that such provisions and restrictions are not inconsistent
with this Plan. Each Option Agreement shall constitute a binding contract
between the Company and the Grantee.
G. Every action, decision, interpretation or determination by the
Plan Administrators with respect to the application or administration of this
Plan shall be made in the sole and absolute discretion of the Compensation
Committee subject to compliance with this Plan and, if not inconsistent with
this Plan, shall be final and binding upon the
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Company and each person holding or claiming any right pursuant to this Plan or
any Option which is granted pursuant to this Plan.
3. Stock Subject to this Plan
A. The shares of Common Stock to be issued upon exercise of Options
which are granted pursuant to this Plan shall be made available, in the sole and
absolute discretion of the Board, either from the authorized but unissued shares
of Common stock or from shares of Common Stock which are reacquired by the
Company, including shares which are purchased in the open market.
B. The number of shares of Common Stock which may be granted
pursuant to this Plan shall be twenty percent (20%) of the outstanding Common
Stock, on a fully diluted basis on the date of grant, excluding outstanding
options.
C. If any Option which is granted under this Plan shall expire 'or
terminate for any reason without having been exercised in full, the unpurchased
shares of Common Stock shall (unless this Plan shall have been terminated)
become available for the granting of Options to the same grantee or to other
grantees.
D. If the number of outstanding shares of Common Stock shall be
changed through any recapitalization, stock split or stock dividend, or similar
transaction, the number and kind of shares of Common Stock for which Options may
be granted thereafter pursuant to this Plan and the number of shares of Common
Stock subject to Options theretofore granted pursuant to this Plan and the price
per share payable upon exercise of such outstanding Options shall be adjusted as
determined by the Compensation Committee so as to reflect such change; provided,
however, that no such adjustment shall be made because additional shares of the
Common Stock have been issued for services, property or money; provided further,
however that if shares of Common Stock are issued for services, property, or
money, the quantity of such services, property or money shall be deemed to be
adequate consideration for purposes of this Paragraph "D" of this Article "3" of
this Plan.
E. If the existence of the Company is terminated because of the
dissolution, liquidation, merger or consolidation of the Company, or a sale of
all or substantially all of the assets of the Company, every Option held by a
person or entity pursuant to this Plan, or because of such person or entity's
relationship with the Company, its Parent and all Subsidiaries (the question of
whether an Option is held as because of such relationship with the Company, its
Parent and all Subsidiaries shall be determined by the Compensation Committee),
shall be canceled simultaneously with the occurrence of such event upon written
notice to the Grantees unless the Board shall by resolution provide otherwise;
provided, however, that for a period of fifteen (15) days after receiving
written notice, of the occurrence of such event (i) each such Grantee shall have
the right to exercise his, her or its currently vested options immediately to
the extent it shall not theretofore have been exercised, or (ii) should the
Compensation Committee have provided a Change of Control provision (defined by
the Committee at time of grant) to any Grantee as a term of their option
agreement, all options shall vest immediately
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upon written notice of the occurrence of a Change of Control and the Grantee
shall have a period of fifteen (15) days after receiving the written notice to
exercise his, hers or its options to the extent it shall not theretofore have
been exercised, but (iii) in no event may any Option be exercised after the
original expiration date of the Option; provided further, however, that any
other limitation upon the exercise of such Option which may then be in effect
upon the date of exercise shall be applicable.
F. The granting of an Option under this Plan shall not affect in any
way the right or power of the Company, its Parent or a Subsidiary to make
adjustments, reorganizations, reclassifications, or changes of its capital or
business structure or to merge, consolidate, dissolve, liquidate, or sell or
transfer all or any part of its business or assets.
4. Eligibility of Grantees; Restricted Stock
A. An ISO may be granted only to persons who are employees of the
Company, its Parent or a Subsidiary. The term "employees" shall include officers
who are employees of the Company, its Parent or a Subsidiary and shall include
directors who are also employees of the Company, its Parent or a Subsidiary. Any
person who is not an employee of the Company may be granted only Non-Qualified
Options.
B. In deciding to whom and for how many shares of Common Stock an
Option shall be granted, the Compensation Committee shall consider the
relationship of the Grantee to the Company, the present and potential
contributions of the Grantee to the success of the Company, the anticipated
number of years of additional service of the Grantee to the Company and such
other factors which are deemed relevant by the Compensation Committee for
accomplishing the purpose of this Plan.
C. No ISO shall be granted to any person who, after taking into
account stock attributed to such individual under Section 424 (d) of the Code
owns, at the time when the Option is granted, more than ten (10%) percent of the
total combined voting power of all classes of shares of the Company, its Parent
or a Subsidiary (the "ten (10%) percent limitation"); provided, however, that
the foregoing does not disqualify an ISO whose exercise increases the employee's
ownership and voting power from ten (10%) percent or less to more than ten (10%)
percent; provided however, that the ten (10%) percent limitation shall not be
applicable if the Option price is at least one hundred ten (110%) percent of the
fair market value of the shares which are subject to the Option and the Option
is exercisable for a period not exceeding five (5) years after it is granted;
provided, further, however that if the Code is amended to revise any of the
foregoing and if such amendment is applicable to this Plan, then the foregoing
shall be deemed amended and modified to comply with such amendment. The
foregoing restrictions which are contained in this Paragraph "C" of this Article
"4" of this Plan shall not be applicable to Non-Qualified Options.
D. Any person who has been granted one or more Options under this
Plan or otherwise may, if this Plan so allows, be granted one or more additional
Options under this Plan.
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E. Notwithstanding any other provision of this Plan to the contrary,
the Compensation Committee shall have the right, either in addition to or in
lieu of the grant of Options, to grant awards of restricted stock ("Restricted
Stock") in amounts to be determined in the sole and absolute discretion of the
Compensation Committee.
The Compensation Committee may proscribe that the employees'
rights to the Restricted Stock shall be forfeitable or otherwise restricted
pursuant to the terms and conditions set forth in this Plan. Such proscription
of the Restricted Stock shall not limit the employees' rights with respect to
such shares, including, but not limited to the right to receive dividends and
vote the Restricted Stock; provided, however, that the Restricted Stock shall be
subject to such restrictions on the transfer of stock as may be applicable
pursuant to the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.
5. Option Price
The exercise price per share of Common Stock under each Option to be
granted shall be determined by the Compensation Committee but, shall not be less
than the fair market value of the Common Stock if such Option is an ISO and at
least eighty five (85%) percent of such value for Non-Qualified options;
provided, however, that if the Grantee, at the time the Option is granted, owns
more than ten (10%) percent of the total combined voting powers of all classes
of stock of the Company, the Option price shall be not less than 110% of the
fair market value of the Common Stock if such Option is an ISO. For purposes of
this Plan, and subject to the limitations herein, fair market value of the
Common Stock on a given date shall be either: (A) if the Common Stock is listed
on a national securities exchange or quoted in a inter-dealer quotation system,
the last sale price per share of, if unavailable, the average of the closing bid
and asked prices per share of the Common Stock on such date (or, if there was no
trading or quotation in the Common Stock on such date, on the next preceding
date on which there was trading or quotation) as provided by such exchange or
system; or (B) if the Common Stock is not listed on a national securities
exchange or quoted in an inter-dealer quotation system, as determined by the
Compensation Committee. In no event shall such purchase price be less than the
par value of the Common Stock of the Company.
6. Nontransferability of Option
No option granted under this Plan shall be transferable by the
Grantee, either voluntarily or by operation of law, otherwise than by the
Grantee's last will and testament or the laws of descent and distribution, and
no Grantee shall pledge, hypothecate or otherwise create any lien thereon.
During the lifetime of any Grantee, an option shall be exercised only by the
Grantee or the Grantee's guardian or legal representative if the Grantee is
legally incompetent. The Option Agreement shall provide that upon granting
Options pursuant to this Plan, the Grantee shall execute and deliver to the
Company an Option Agreement in a form approved from time to time by the
Compensation Committee in which the Grantee shall represent and warrant that,
among other things, the purchase of Common Stock pursuant thereto is for
investment only, and
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not with a view to distribution involving a public offering. Such a provision
shall not be required in any Option Agreement if the Option has been registered
by the Company pursuant to a registration statement filed under the Securities
Act of 1933, as amended.
7. Exercise of Option
A. Each option which is granted under this Plan shall by its terms
expire at such time as designated by the Compensation Committee at the time such
Option is granted; provided, however, for ISOs such period shall expire not
later than ten (10) years from the date when such Options were granted; provided
further, however, that if any individual owns, at the time the ISO is granted,
shares possessing more than ten (10%) percent of the total combined voting power
or value of all classes of shares of the Company, its Parent or Subsidiary as
set forth in Paragraph "C" of Article "4" of this Plan, such period shall expire
not later than five (5) years from when such ISO was granted. The Plan
Administrators may prescribe a longer period for any Non-Qualified option.
B. Each Option which is granted under this Plan shall become vested
after one year of continued employment by the Grantee by the Company, its Parent
or a Subsidiary immediately following the date of the grant as follows:
one-third of the aggregate number of shares subject to the Option shall be
vested one year after the date of grant and, cumulatively, an additional
one-third of the aggregate number of shares subject to the Option shall be
vested at the expiration of each year thereafter so that three years after the
grant of the Option, each Option shall be fully vested and exercisable, subject
to the provisions of the Plan; provided, however, that if any individual owns,
at the time the ISO is granted, shares possessing more than ten (10%) percent of
the total combined voting power or value of all classes of shares of the
Company, its Parent or Subsidiary as set forth in Paragraph "C" of Article "4"
of this Plan, ISOs which are first vested at the expiration of the fifth year of
continued employment immediately following the date upon which the option is
granted may be exercised commencing thirty (30) days prior to the expiration of
such fifth year. Notwithstanding the foregoing, the Plan Administrators may
declare any other vesting schedule for any Option. An Option may be exercised
only during the continuance of the Grantee's employment, except as otherwise
provided in Articles "8" or "9" of this Plan.
Notwithstanding the above, if the Grantee is not an employee of the
Company, its Parent or a Subsidiary, the Plan Administrators may declare a
vesting schedule at their discretion. Should no vesting schedule be determined
by the Plan Administrator, then one-third of the aggregate number of shares
subject to the Option shall be vested one year after the date of grant and,
cumulatively, an additional onethird of the aggregate number of shares subject
to the Option shall be vested at the expiration of each year thereafter so that
three years after the grant of the Option, each Option shall be fully vested and
exercisable, subject to the provisions of the Plan.
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C. A person electing to exercise an Option shall give written notice
to the Company which shall include the number of shares to be purchased;
provided, however, that no Option may be exercised as to less than 100 shares
unless it is exercised as to all of the shares then purchasable pursuant to this
Plan.
Any exercisable portion of a Stock Option may be exercised only by
payment in full of the exercise price of such Option by, as applicable (i) cash
or cheque for an amount equal to the aggregate Option exercise price for the
number of shares being purchased, (ii) in the discretion of the Plan
Administrator, upon such terms as the Plan Administrator shall approve, a copy
of instructions to a broker directing such broker to sell the Common Stock for
which such Option is exercised, and to remit to the Company the aggregate
exercise price of such Options (a "cashless exercise"), or (iii) in the
discretion of the Plan Administrator, upon such terms as the Plan Administrator
shall approve, the Optionee may pay all or a portion of the purchase price for
the number of shares being purchased by tendering shares of the Company's Common
Stock owned by the Optionee, duly endorsed for transfer to the Company, with a
fair market value (determined as provided in Article "5" of this Plan) on the
date of delivery equal to the aggregate purchase price of the shares with
respect to which such Stock Option or portion is thereby exercised (a "stock for
stock exercise").
No shares shall be delivered upon exercise of an Option until the
requirements of such laws and regulations as may be deemed to be applicable by
the Compensation Committee have been fulfilled. In addition, upon notification
of the amount due, and not after delivery to the Grantee of a certificate
representing such shares, the Grantee shall pay promptly any amount which is
necessary to satisfy federal, state or local tax requirements. The aforesaid
notice shall make such representations as to the investment intent of the
purchaser, the information to which the purchaser shall have had access, and
such other matters as the Compensation Committee shall require, including, but
not limited to, the statement in the form annexed hereto as Exhibit "A" which
shall satisfy counsel to the Company that registration under the Securities Act
of 1933, as amended, is not required for the issuance of the shares which are to
be purchased. The Board may waive the making of such representations if the
shares which are being purchased shall have been so registered under the
applicable securities laws, but the Company shall have no obligation to any
Grantee to effect any such registration.
D. A legal representative, legatee or distributee of a Grantee shall
be deemed to be a holder of any shares upon the Company's receipt of the
exercise of any Option by such legal representative, legatee or distributee with
payment of the full exercise price, after which time the foregoing legal
representative shall have the right to receive any dividends, to vote, and to
exercise any other right as a shareholder as to any such shares, notwithstanding
the fact that such legal representative shall not have received the certificate
or certificates for such shares.
8. Termination of Employment; Leave of Absence
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A. Except as otherwise provided in Article "9" hereof, if any
Grantee under this Plan shall cease to be an officer, director, employee or
consultant of, or have another relationship with, the Company, its Parent or a
Subsidiary for any reason, 'such Grantee's Option may be exercised to the extent
that the Grantee had the right to exercise such Option at the date of
termination of the relationship until the earlier of the expiration date of such
option or three (3) months after the date of the termination of the
relationship; provided however, that if any officer, director, employee or
consultant of, or have another relationship with, the Company, its Parent or a
Subsidiary is terminated for "cause", such Option shall terminate on the date of
the termination of the relationship. For purposes of this Plan, "cause" shall
mean the officer, director, employee or consultant's fraud, misappropriation,
theft or embezzlement.
B. Any Option which is granted hereunder shall not be affected by
any change of duties or position of the Grantee; provided, however, that for an
ISO, the Grantee shall continue to be an employee of the Company, its Parent or
a Subsidiary.
C. An Option Agreement may contain, to the extent permitted by
applicable law, such provisions as the Compensation Committee shall approve for
the determination of when a Grantee terminates his or her relationship with the
Company, its Parent or a Subsidiary, and the effect of leaves of absence, which
provisions may vary from one Option Agreement to another.
D. Nothing herein or in any Option Agreement shall confer upon any
officer, director, employee or any other person or entity any right to continue
in his, her or its position or relationship with the Company, its Parent or a
Subsidiary, or affect the right of the Company, its Parent or a Subsidiary, as
the case may be, to terminate such position or relationship at any time unless
otherwise provided for by agreement with the Company, its Parent or a
Subsidiary.
9. Retirement with Consent, or Upon the Death or Total Disability of
Grantee.
If a Grantee shall (A) if an employee, retire with the consent of
the Company, its Parent or a Subsidiary, (B) die while he is an officer,
director, employee or consultant of or have another relationship with the
Company, its Parent or a Subsidiary, (C) become permanently and totally disabled
(within the meaning of Section 22(e)(3) of the Code), while he is an officer,
director, employee or consultant of, or have another relationship with, the
Company, its Parent or a Subsidiary or (D) die within three (3) months after his
termination from any such position, such Grantee's Option may be exercised as
follows: by the Grantee within three (3) months after the date of his retirement
or becoming totally disabled, as the case may be, or by the personal
representative of the Grantee within one (1) year after the death of the Grantee
while an officer, director, employee or consultant of, or have another
relationship with, the Company, its Parent or a Subsidiary or within one (1)
year after the death of the Grantee if the Grantee should die within three (3)
months after the date of the Grantee's retirement or becoming totally disabled,
as the case may be. In no event may any Option be
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exercised after the original expiration date of the Option and in all events,
any Option may be exercised only to the extent that the Grantee was entitled to
exercise the Option immediately preceding his termination by retirement, death,
disability or otherwise as an officer, director, employee or consultant of, or
have another relationship with, 'the Company, its Parent or a Subsidiary. If an
employee retires without the consent of the Company, then the provisions of this
Article "9" of this Plan shall not be applicable and the provisions of Article
"8" hereof with respect to termination shall be applicable.
10. Granting of Options
The grant of any Option pursuant to this Plan shall be in the sole
and absolute discretion of the Compensation Committee and nothing iri this Plan
shall be construed to confer upon any person or entity any rights except as
specifically set forth in this Plan.
11. Indemnification and Exculpation
A. Each person, who is or shall have been a member of the
Compensation Committee, shall be indemnified and held harmless by the Company
against and from any and all loss, cost, liability or expense which may be
imposed upon or reasonably incurred by such person because of any claim, action,
suit or proceeding to which such person may be a party or in which such person
may be involved by reason of any action taken or failure to act under this Plan
and against and from any and all amounts which are paid by such person in
settlement thereof (with the Company's prior written approval) or paid by such
person in satisfaction of a judgment in any such action, suit, or proceeding,
except a judgment based upon a finding of such person's willful malfeasance or
fraud; provided, however, that as a condition precedent to such indemnification,
upon the institution of any claim, action, suit or proceeding against such
person, such person shall be required to give prompt written notice to the
Company of such claim, action, suit or proceeding which notice shall contain a
reasonably thorough description of the nature and amount of the claim of
indemnification. The Company shall have the right, at its own expense, to
participate in and, to the extent ii may wish to, assume the defense thereof
before such person undertakes said defense. The Company's right to assume the
defense of any claim, suit or proceeding shall be a condition precedent to the
Company's indemnification obligation and if the Company is not given said right,
it shall have no obligation to assume such defense and provide indemnification.
If such written notice is not timely provided, the Company shall have no
obligation to indemnify such person. The foregoing right of indemnification
shall not be exclusive of any other right to which such person may be entitled
as a matter of law or otherwise, or any obligation or power that the Company may
have to indemnify such persons or hold harmless such persons, whether pursuant
to the Company's By-Laws or otherwise.
B. Each member of the Board of Directors, and Compensation
Committee, and each officer and employee of the Company shall be fully justified
in relying or acting upon any information which is furnished to the Company by
any person
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or persons other than himself or herself for the administration of this Plan. In
no event shall any person who is or shall have been a member of the Board or
Compensation Committee, or an officer-or employee of the Company, be liable for
any determination made or other action taken or any omission to act in reliance
upon any such information, or for any action taken (including the furnishing of
information) or any failure to act, if in good faith.
12. Tax Withholding
The Company shall have the right to require that the Grantee make
such provision, or furnish the Company such authorization, necessary or
desirable so that the Company may satisfy any obligation it may have under
applicable laws, to withhold or otherwise pay for income or other taxes of the
Grantee attributable to the grant or exercise of Options granted pursuant to
this Plan or the sale of Common Stock issued with respect to Options. This
authority shall include authority to withhold or receive stock or other property
and to make cash payments in respect thereof in satisfaction of a Grantee's tax
obligations.
13. Adoption of the Plan
This Plan shall be deemed to be in effect on the date upon which
this Plan has been adopted by the Board of Directors; provided, however, that
this Plan shall be deemed null and void unless the holders of a majority of the
Common Stock shall approve of and consent to such adoption within one (1) year
after the date of Board approval.
14. Amendments and Termination of Plan
A. The Board of Directors may at any time terminate, or from time to
time modify or suspend, this Plan. The Board may make such amendments and
modifications as it deems advisable, in its sole and absolute discretion, except
that the Board of Directors may not, without approval of the Stockholders
increase the total number of shares with respect to which Options may be granted
under this Plan, except as may be effected pursuant to the provisions of Article
"3" hereof or change the class of employees who are eligible to be granted ISOs
under this Plan; provided, however, that if the Code is amended to revise any
provision which is contained in this Plan regarding ISOs, then the foregoing
shall be deemed amended and modified to comply with such amendment and provided,
further, however, that if any shareholder approval is necessary or desirable in
order to comply with Rule 16b-3 under the Exchange Act or with Section 422 of
the Code (or other applicable law or regulation) such shareholder approval shall
be obtained in compliance with each of such laws. In addition, the Plan may not
be amended without shareholder approval more than once every six months, other
than to comply with changes to the Code, Employee Retirement Income Security
Act, or the rules and regulations promulgated under each of such laws.
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B. No amendment, modification or termination hereof shall in any
manner affect any Option theretofore granted under this Plan without the consent
of the Grantee.
C. Unless sooner terminated, no ISOs shall be granted pursuant to
this Plan after the tenth (10th) anniversary date of the date upon which this
Plan is adopted by the Board; provided, however, that any and all options which
are granted under this Plan shall continue in full force and effect until
terminated in accordance with the terms and conditions of this Plan.
14. Trading, of Stock underlying Option
A. In accordance with the Company's Trading Policy, the shares
underlying the Options shall not be traded during black out periods (as defined
by the Company from time to time). Black out periods include, but are not
limited to, a five (5) day period following the filing of the Company's
quarterly and annual financial statements with the Securities and Exchange
Commission and a two (2) day period prior to and one (1) day period after any
formal press release has been distributed to the financial wire services and
press and carried on any major business wire. This restriction shall only be
limited to the trading of stock and shall not limit the Grantee's ability to
exercise an option and hold the stock of the Company. If the Company's Trading
Policy is amended to affect the black out restrictions, this agreement will be
deemed to be amended to reflect the current policy in effect at the time of
trade.
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