EXHIBIT 99.2
EMERGENT GROUP INC.
2001 STOCK OPTION PLAN
1. Purpose of the Plan.
The purpose of the Emergent Group Inc. 2001 Stock Option Plan (the
"Plan") is to promote the interests of Emergent Group Inc., a Nevada corporation
(the "Company"), and its stockholders by strengthening the Company's ability to
attract and retain competent employees, to make service on the Board of
Directors of the Company (the "Board") 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.
2. Options Granted under the Plan.
(a) The Company is authorized under this Plan to grant (i) incentive
stock options ("qualified incentive options") that are intended to satisfy the
requirements of Section 422 of the Internal Revenue Code of 1986, as amended
(the "Code") and (ii) non-qualified stock options ("non-qualified options") that
are not intended to satisfy the requirements of Section 422 of the Code with
respect to shares of the Company's common stock, $0.001 par value per share
("Common Stock").
(b) 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 qualified incentive stock options that are intended to satisfy the
requirements of Section 422 of the Code, or non-qualified options that are not
intended to satisfy the requirements of Section 422 of the Code. Such
designation shall be in the sole discretion of the Board. Options designated as
qualified incentive stock options that fail to satisfy, or fail to continue to
satisfy, the requirements of Section 422 of the Code by reason of the transfer,
exercise or failure to exercise such options or as otherwise provided in Section
422 of the Code shall be re-designated as non-qualified options automatically on
the date of such failure without further action by the Board.
3. Stock Subject to the Plan.
(a) The total number of shares (the "Total Authorized Plan Shares") of
the authorized but unissued or treasury shares of Common Stock for which the
Company is authorized under this Plan to grant qualified incentive stock options
and non-qualified options shall be equal, in the aggregate, to Six Million
(6,000,000) shares.
(b) The number of Total Authorized Plan Shares shall be subject to
adjustment as provided in Section 14 hereof and may be shares of any class of
Common Stock as determined by the Board; provided, however, that, in either
case, such number of shares may from time to time be reduced by the Board to the
extent that a corresponding number of issued and outstanding shares of Common
Stock are purchased by the Company and set aside for issue upon the exercise of
options hereunder.
(c) If an option granted or assumed hereunder shall expire, terminate
or be cancelled 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.
(d) Stock issuable upon exercise of an option under the Plan may be
subject to such restrictions on transfer, repurchase rights or other
restrictions as shall be determined by the Board.
4. Administration of the Plan.
The Plan shall be administered by the Board. No member of the Board
shall act upon any matter exclusively affecting an option granted or to be
granted to himself or herself under the Plan. A majority of the members of the
Board shall constitute a quorum, and any action may be taken by a majority of
those present and voting at any meeting. 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 Common Stock and issue shares upon exercise of
such options, as provided in the Plan. The Board shall have authority, subject
to the express provisions of the Plan, to construe the respective option
agreements and the Plan, to prescribe, amend and rescind rules and regulations
relating to the Plan, to determine the terms and provisions of the respective
option agreements, which 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
"Non-Employee Directors" (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 a "Non-Employee
Director" only if such person qualifies as a "Non-Employee Director" within the
meaning of paragraph (b)(3)(i) of Rule 16b-3 promulgated under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and Section 162(m) of the
Code, as such term is interpreted from time to time.
5. Eligibility.
(a) Options designated as qualified incentive stock options may be
granted only to officers and key employees of the Company or of any subsidiary
(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 qualified incentive stock options pursuant to the
Plan. 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
and directors of and consultants to the Company, whether or not otherwise
employees of the Company.
(b) In determining the eligibility of an individual to be granted an
option, and in determining the number of shares to be optioned to any
individual, the Board shall take into account the recommendation, if any, of the
chief executive officer of the Company, the position and responsibilities of the
individual being considered, the length of such individual's employment with or
services to the Company or the subsidiaries, 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 Qualified Incentive Stock Options.
Qualified 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. The aggregate fair market value of
the shares of Common Stock with respect to which qualified incentive stock
options are granted, determined as of the date the qualified incentive stock
options are granted, exercisable for the first time by an individual during any
calendar year shall not exceed $100,000. If a qualified 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
which first becomes exercisable in the same such 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 qualified
incentive stock options may be granted under this Plan and all such other plans.
(b) Ten Percent (10%) Stockholder. If any employee to whom a qualified
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 qualified incentive
stock options granted to such individual:
(i) The option price per share subject to such qualified
incentive stock options shall not be 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 qualified 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 shall be evidenced by a written agreement (the "Agreement"
or the "ISO Agreement") duly executed on behalf of the Company and by the
grantee to whom such option 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 qualified
incentive stock options shall meet all of the conditions for qualified incentive
stock options as defined in Section 422 of the Code. No option shall be granted
within the meaning of the Plan and no purported grant of any option shall be
effective until the Agreement shall have been duly executed on behalf of the
Company and the optionee. More than one option may be granted to any individual.
8. Option Price.
(a) The option price or prices of shares of 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 Section 6(b) hereof, the
option price or prices of shares of Common Stock for options designated as
qualified 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 subsection (c) below.
(c) The fair market value of Common Stock shall be determined as
follows:
(i) If the Common Stock is listed on or quoted on any established
stock exchange or a national market system, including without
limitation the Nasdaq National Market or The Nasdaq SmallCap Market,
its fair market value shall be the mean between the high and low sales
price for such stock on such exchange or system on the date of such
grant, as reported in The Wall Street Journal or such other source as
the Board deems reliable; or, if none, shall be the mean of the
closing "bid" and "ask" prices, if any, for the Common Stock on the
date of such grant, as reported in The Wall Street Journal or such
other source as the Board deems reliable; 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 Section 25.2512-2 of
the Regulations;
(ii) If the Common Stock is not then listed or quoted on any
established stock exchange or national market system, its fair market
value shall be the average of the "bid" prices, if any, for the Common
Stock on the date of such grant, as reported in National Daily
Quotation Service or such other source as the Board deems reliable;
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
Section 25.2512-2 of the Regulations; and
(iii) If the fair market value of the Common Stock cannot be
determined under either (i) or (ii) of Section (c) above, the fair
market value thereof shall be determined in good faith by the Board.
(iv) Regardless of (i) or (ii) of Section (c) above, if the last
sales price is reported, that value should be used.
9. Manner of Payment; Manner of Exercise.
(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
Common Stock owned by the optionee having a fair market value equal in amount to
the exercise price of such options, or (iii) any combination of (i) and (ii);
provided, however, that payment of the exercise price by delivery of shares of
Common Stock 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 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 to the
person or persons exercising the option at such time and place, as shall be
designated in such notice, during ordinary business hours, after three (3) days
but not more than ninety (90) days from the date of receipt of the notice by the
Company, 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.
Each option granted under the Plan shall, subject to Section 11 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 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 is not exercised when it becomes initially exercisable,
such option shall not expire but shall be carried forward and shall be
exercisable, on a cumulative basis, until the expiration of the exercise period
provided in the Agreement unless and until such option sooner terminates or is
cancelled pursuant to Section 11 hereof. No partial exercise may be made for
less than one hundred (100) full shares of Common Stock. However, exercises of
options in blocs of fewer than one hundred (100) full shares of Common Stock may
be made provided such amount represents all of the then exercisable options held
by such person.
11. Term, Expiration, Exercisability and Rescission of Options.
(a) Term and Expiration.
(i) Except as otherwise expressly provided by Section 6(b) of
this Plan, each option granted under the Plan shall expire ten (10)
years from the date of the granting thereof unless sooner terminated or
cancelled as provided in this Section 11 or in the Agreement.
(ii) The term of any option granted to any grantee who ceases
for any reason to perform services for the Company or one of its
subsidiaries shall automatically expire, terminate and be cancelled to
the extent such option is not then vested, accrued or otherwise
exercisable under the Agreement and this Plan on the earlier of (A) the
date such grantee ceases to perform services for the Company or one of
its subsidiaries or (B) the date on which the option expires by its
terms; provided, however, that in the event the grantee ceases to
perform services for the Company or one of its subsidiaries because the
grantee has become permanently disabled (within the meaning of Section
22(e)(3) of the Code) or due to the death of the grantee, all options
that have not expired and are not then vested shall automatically
become vested and exercisable on the day preceding the date the grantee
ceases to perform such services by reason of such disability or death;
and provided further, that the Board, in its sole discretion, may,
under any circumstances and at any time, (x) permit the option to
continue in effect in accordance with the terms of the Agreement and
this Plan after the grantee ceases to perform services for the Company
or a subsidiary (but not beyond the date on which the option expires by
its terms) and/or (y) accelerate the vesting and exercisability of such
option with respect to shares that are not vested or otherwise
exercisable under the provision of the Agreement or this Plan at the
time the grantee ceases to perform such services.
(b) Limitations on Exercise.
(i) Except as provided in the Agreement or under this Plan, in
the event a grantee of an option ceases for any reason to perform
services for the Company or one of its subsidiaries, any option
granted to such grantee that is vested, accrued and otherwise
exercisable and in effect under this Plan on the date such grantee
ceases to perform such services shall automatically terminate and be
cancelled unless such option is exercised in accordance with the
Agreement and this Plan on or before the earlier of (A) the date on
which the option expires by
its terms or (B) the 90th day after the grantee ceases to perform
such services; provided, however, that in the event the grantee ceases
to perform services for the Company or one of its subsidiaries because
the grantee becomes permanently disabled (within the meaning of
Section 22(e)(3) of the Code) or due to the death of the grantee, the
period within which the grantee (or his executor, administrator or
personal representative, as the case may be) may exercise such vested
option under clause (B) in the preceding sentence shall be extended
from 90 days to one year after the grantee ceases to perform such
services by reason of such disability or death (but in no event beyond
the date on which the option expires by its terms); and provided
further, that the Board, in its sole discretion, may, under any
circumstances and at any time, extend the period within which such
vested option may be exercised beyond such 90 day or one year period,
as the case may be, (but in no event beyond the date on which the
option expires by its terms), subject to earlier cancellation pursuant
to clause (ii) of this subsection 11(b) and/or rescission pursuant to
subsection 11(c) hereof.
(ii) Notwithstanding any provisions of the Agreement or under
this Plan, in the event the Company or a subsidiary terminates the
employment of any grantee of an option on the grounds that such
grantee engaged in any of the following activities ("Wrongful
Activities"), or if at any time it is determined by the Board that the
grantee engaged in any Wrongful Activity either during or after his or
her employment with the Company or a subsidiary, then, in either of
such events, any and all options granted to such grantee hereunder
shall automatically terminate and be cancelled upon such termination
of employment or determination by the Board, as the case may be,
regardless of the extent to which such options are or were otherwise
vested, accrued and exercisable:
(A) the commission by the grantee of a criminal act
punishable as a felony with respect to his or her employment with
the Company or any subsidiary; or
(B) the unlawful taking or use by the grantee of any asset
or property of the Company or of any subsidiary; or
(C) the breach by the grantee of any of the terms or
conditions of the Agreement or of any other written agreement
(which for these purpose shall include any ISO Agreement and/or
any employment agreement or provision of employee handbook)
between the employee and the Company or a subsidiary (which for
these purpose shall include any predecessor entity or equity
owner of such entity) insofar as such terms prohibit or otherwise
restrict the grantee from (x) using or disclosing any
confidential information of the Company or any subsidiary, (y)
soliciting or assisting any individual to leave the employ of the
company or any subsidiary or (z) competing with, or rendering
services to any competitor of, the Company or any subsidiary.
(c) Rescission. Upon the exercise of any option at any time during or
after the grantee's employment with the Company or a subsidiary, the grantee
shall certify on a form acceptable to the Board that the grantee is in
compliance with all of the terms and conditions of the Agreement and Plan and
has not engaged in any Wrongful Activities. If at any time following the
exercise of any option the Board determines that the grantee engaged in any
Wrongful Activities at any time either prior to or within one year after such
exercise, the exercise of such option, and any payment and delivery in
connection therewith, shall be cancelled and rescinded. The Company shall notify
the grantee in writing of any such rescission immediately after such exercise.
Within ten days after delivery of such notice to the grantee, the grantee shall
pay to the Company the amount of any gain realized or payment received as a
result of the rescinded exercise, payment or delivery. Such payment shall be
made, in the discretion of the Board, either in cash or by returning to the
Company the number of shares of common Stock received by the grantee in
connection with the rescinded exercise, payment or delivery. The remedies
contained in this Section 11 with respect to the rescission and/or cancellation
of any option granted to any grantee who engages in any Wrongful Activity shall
be in addition to, and shall not be construed as a limitation of, any and all
other remedies available to the Company against such grantee by reason of such
Wrongful Activity.
12. Options Not Transferable.
The right of any grantee to exercise any option granted to him or her
shall not be assignable or transferable by such grantee other than by will or
the laws of descent, and any such option shall be exercisable during the
lifetime of such grantee only by him; provided, that the Board may permit a
grantee, by expressly so providing in the related Agreement, to assign or
transfer, without consideration (and only without consideration), the right to
exercise any option granted to him or her to such grantee's children,
grandchildren or spouse, to trusts for the benefit of such family members and to
partnerships in which such family members are the only partners. Any option
granted under this 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.
13. [ Reserved ].
14. Recapitalization, Reorganization and the Like.
(a) In the event that the outstanding shares of Common Stock are
increased, decreased or changed into or exchanged for a different number or kind
of shares or other securities of the Company or of another corporation (or
entity) by reason of any reorganization, merger, consolidation,
recapitalization, reclassification, stock split-up, combination of shares,
dividends payable in capital stock, or other capital adjustment, appropriate
adjustment shall be made in accordance with Section 424(a) of the Code in the
number and kind of shares as to which options may be granted under the Plan and
as to which outstanding options 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 shall be made without change in the total price applicable
to the unexercised portion of such options and with a corresponding adjustment
in the exercise price per share.
(b) 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 stockholders of
the Company as a result of such sale, conveyance or Change in Control, or the
Board may cancel all outstanding options 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 had been made prior to
such sale, conveyance or Change in Control, less the exercise price therefor.
Upon receipt of such consideration, the options 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, and in the case of shares of Common
Stock, in accordance with the provisions of Section 8 hereof.
(c) The Board shall also have the power and right to accelerate the
exercisability of any options, notwithstanding any limitations in this Plan or
in the Agreement, upon such a sale, conveyance or Change in Control. Upon such
acceleration, any options or portion thereof originally designated as qualified
incentive stock options that no longer qualify as qualified incentive stock
options under Section 422 of the Code as a result of such acceleration shall be
redesignated as non-qualified stock options.
(d) 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, shall acquire such additional shares of
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 Common Stock outstanding.
(e) 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.
(f) No fraction of a share shall be purchasable or deliverable upon the
exercise of any option, but in the event any adjustment hereunder in the number
of shares covered by the option 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 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. Whether an authorized
leave of absence, or absence in military or government service, shall constitute
termination of employment shall be determined in accordance with Regulations
Section 1.421-7(h)(2).
16. Withholding.
The Company's obligation to deliver shares upon the exercise of any
non-qualified option 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 to satisfy
the above-mentioned withholding requirements; provided, however, that 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 hereof, the Company may
delay the issuance of shares covered by the exercise of an option and the
delivery of a certificate for such shares until one of the following conditions
shall be satisfied:
(i) The shares with respect to which such option 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 options 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.
(a) Unless the shares to be issued upon exercise of an option granted
under the Plan have been effectively registered under the Securities Act of
1933, as amended (the "1933 Act"), the Company shall be under no obligation to
issue any shares covered by any option 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 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.
(b) 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 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.
Subject to limitations contained herein, the Board may authorize the
amendment of any outstanding option 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.Term of Plan.
The Plan shall become effective upon the earlier to occur of its
adoption by the Board of Directors or its approval by the shareholders of the
Company. It shall continue in effect for a term of ten (10) years unless sooner
terminated under Section 22 hereof. The Board may grant options under the Plan
prior to stockholder 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.
The Board may at any time terminate the Plan or make such modification
or amendment thereof as it deems advisable; provided, however, that (i) the
Board may not, without approval by a majority vote of the stockholders of the
Company, increase the maximum number of shares for which options may be granted
or change the designation of the class of persons eligible to receive options
under the Plan, and (ii) any such modification or amendment of the Plan shall be
approved by a majority vote of the stockholders 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 National Association of Securities Dealers,
Inc. 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 theretofore granted to him or her.
23. Limitation of Rights in the Underlying Shares.
A holder of an option shall not be deemed for any purpose to be a
stockholder of the Company with respect to such option except to the extent that
such option 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 shall be deemed given and delivered when mailed by
registered or certified mail or delivered by hand and addressed, if to the
Company, at its principal place of business, attention: Chairman, and, if to the
grantee or holder of an option, at the address of the grantee or holder
appearing on the records of the Company.
Governing Law and Consent to Jurisdiction.
(a) To the extent that Federal laws do not otherwise control, the Plan
and all determinations and actions taken pursuant to the Plan shall be governed
by the laws of New York without regard to its conflicts of law principles and
construed accordingly.
(b) The state and federal courts located within the County of New York,
state of New York shall be the exclusive forum for resolution of any disputes
arising under or relating to the Plan. All recipients of options pursuant to the
Plan consent to the exclusive jurisdiction of such courts. Service of process in
connection with any action arising under or related to the Plan may be made in
the manner prescribed in Section 24 of the Plan.