EXHIBIT 4.1
ENDOVASC, INC.
2003 STOCK COMPENSATION PLAN
SECTION 1. PURPOSE OF THE PLAN. The purpose of the 2003 Stock Compensation
Plan ("Plan") is to maintain the ability of Endovasc, Inc., a Nevada corporation
(the "Company") and its subsidiaries to attract and retain highly qualified and
experienced directors, employees and consultants and to give such directors,
employees and consultants a continued proprietary interest in the success of the
Company and its subsidiaries. In addition the Plan is intended to encourage
ownership of common stock, $.001 par value ("Common Stock"), of the Company by
the directors, employees and consultants of the Company and its Affiliates (as
defined below) and to provide increased incentive for such persons to render
services and to exert maximum effort for the success of the Company's business.
The Plan provides eligible employees and consultants the opportunity to
participate in the enhancement of shareholder value by the grants of warrants,
options, restricted common, unrestricted common and other awards under this Plan
and to have their bonuses and/or consulting fees payable in warrants, restricted
common, unrestricted common and other awards, or any combination thereof. In
addition, the Company expects that the Plan will further strengthen the
identification of the directors, employees and consultants with the
stockholders. Certain options and warrants to be granted under this Plan are
intended to qualify as Incentive Stock Options ("ISOs") pursuant to Section 422
of the Internal Revenue Code of 1986, as amended ("Code"), while other options
and warrants granted under this Plan will be nonqualified options or warrants
which are not intended to qualify as ISOs ("Nonqualified Options"), either or
both as provided in the agreements evidencing the options or warrants described
in Section 5. Employees, consultants and directors who participate or become
eligible to participate in this Plan from time to time are referred to
collectively herein as "Participants". As used in this Plan, the term
"Affiliates" means any "parent corporation" of the Company and any "subsidiary
corporation" of the Company within the meaning of Code Sections 424(e) and (f),
respectively.
SECTION 2. ADMINISTRATION OF THE PLAN.
(a) Committee. The Plan shall be administered by the Board of Directors of the
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Company (the "Board") or a committee thereof designated by the Board with the
specific authority to administer the Plan. When acting in such capacity the
Board is herein referred to as the "Committee". If the Company is governed by
Rule 16b-3 promulgated by the Securities and Exchange Commission ("Commission")
pursuant to the Securities Exchange Act of 1934, as amended ("Exchange Act"), no
director shall serve as a member of the Committee unless he or she is a
"disinterested person" within the meaning of such Rule 16b-3.
(b) Committee Action. The Committee shall hold its meetings at such times and
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places as it may determine. A majority of its members shall constitute a
quorum, and all determinations of the Committee shall be made by not less than a
majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be fully as effective as if it had
been made by a majority vote of its members at a meeting duly called and held.
The Committee may designate the Secretary of the Company or other Company
employees
to assist the Committee in the administration of the Plan, and may grant
authority to such persons to execute award agreements or other documents on
behalf of the Committee and the Company. Any duly constituted committee of the
Board satisfying the qualifications of this Section 2 may be appointed as the
Committee.
(c) Committee Expenses. All expenses and liabilities incurred by the Committee
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in the administration of the Plan shall he borne by the Company. The Committee
may employ attorneys, consultants, accountants or other persons.
SECTION 3. STOCK RESERVED FOR THE PLAN. Subject to adjustment as provided in
Section 5(d)(xiii) hereof the aggregate number of shares that may be optioned,
subject to conversion or issued under the Plan is 10,000,000 shares of Common
Stock, warrants, options, or any combination thereof. The shares subject to the
Plan shall consist of authorized but unissued shares of Common Stock and such
number of shares shall be and is hereby reserved for sale for such purpose. Any
of such shares which may remain unsold and which are not subject to issuance
upon exercise of outstanding options or warrants at the termination of the Plan
shall cease to be reserved for the purpose of the Plan, but until termination of
the Plan or the termination of the last of the options or warrants granted under
the Plan, whichever last occurs, the Company shall at all times reserve a
sufficient number of shares to meet the requirements of the Plan. Should any
option or warrant expire or be cancelled prior to its exercise in full, the
shares theretofore subject to such option or warrant may again be made subject
to an option or warrant under the Plan.
SECTION 4. ELIGIBILITY. The Participants shall include directors, employees,
including officers, of the Company and its divisions and subsidiaries, and
consultants and attorneys who provide bona fide services to the Company.
Participants are eligible to be granted warrants, options, restricted common,
unrestricted common and other awards under this Plan and to have their bonuses
and/or consulting fees payable in warrants, restricted common, unrestricted
common and other awards. A Participant who has been granted an option or
warrant hereunder may be granted an additional option or warrant, options or
warrants, if the Committee shall so determine.
SECTION 5. GRANT OF OPTIONS OR WARRANTS.
(a) Committee Discretion. The Committee shall have sole and absolute
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discretionary authority (i) to determine, authorize, and designate those persons
pursuant to this Plan who are to receive warrants, options, restricted common,
or unrestricted common under the Plan, (ii) to determine the number of shares of
Common Stock to be covered by such grant or such options or warrants and the
terms thereof, (iii) to determine the type of Common Stock granted: restricted
common, unrestricted common or a combination of restricted and unrestricted
common , and (iv) to determine the type of option or warrant granted: ISO,
Nonqualified Option or a combination of ISO and Nonqualified Options. The
Committee shall thereupon grant options or warrants in accordance with such
determinations as evidenced by a written option or warrant agreement. Subject
to the express provisions of the Plan, the Committee shall have discretionary
authority to prescribe, amend and rescind rules and regulations relating to the
Plan, to interpret the Plan, to prescribe and amend the terms of the option or
warrant agreements (which need not be identical)
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and to make all other determinations deemed necessary or advisable for the
administration of the Plan.
(b) Stockholder Approval. All ISOs granted under this Plan are subject to, and
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may not be exercised before, the approval of this Plan by the stockholders prior
to the first anniversary date of the Board meeting held to approve the Plan, by
the affirmative vote of the holders of a majority of the outstanding shares of
the Company present, or represented by proxy, and entitled to vote thereat, or
by written consent in accordance with the laws of the State of Nevada, provided
that if such approval by the stockholders of the Company is not forthcoming, all
options or warrants and stock awards previously granted under this Plan other
than ISOs shall be valid in all respects.
(c) Limitation on Incentive Stock Options and Warrants. The aggregate fair
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market value (determined in accordance with Section 5(d)(ii) of this Plan at the
time the option or warrant is granted) of the Common Stock with respect to which
ISOs may be exercisable for the first time by any Participant during any
calendar year under all such plans of the Company and its Affiliates shall not
exceed $1,000,000.
(d) Terms and Conditions. Each option or warrant granted under the Plan shall
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be evidenced by an agreement, in a form approved by the Committee, which shall
be subject to the following express terms and conditions and to such other terms
and conditions as the Committee may deem appropriate:
(i) Option or Warrant Period. The Committee shall promptly notify the
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Participant of the option or warrant grant and a written agreement shall
promptly be executed and delivered by and on behalf of the Company and the
Participant, provided that the option or warrant grant shall expire if a
written agreement is not signed by said Participant (or his agent or
attorney) and returned to the Company within 60 days from date of receipt
by the Participant of such agreement. The date of grant shall be the date
the option or warrant is actually granted by the Committee, even though the
written agreement may be executed and delivered by the Company and the
Participant after that date. Each option or warrant agreement shall specify
the period for which the option or warrant thereunder is granted (which in
no event shall exceed ten years from the date of grant) and shall provide
that the option or warrant shall expire at the end of such period. If the
original term of an option or warrant is less than ten years from the date
of grant, the option or warrant may be amended prior to its expiration,
with the approval of the Committee and the Participant, to extend the term
so that the term as amended is not more than ten years from the date of
grant. However, in the case of an ISO granted to an individual who, at the
time of grant, owns stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the Company or its
Affiliate ("Ten Percent Stockholder"), such period shall not exceed five
years from the date of grant.
(ii) Option or Warrant Price. The purchase price of each share of Common
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Stock subject to each option or warrant granted pursuant to the Plan shall
be determined by the Committee at the time the option or warrant is granted
and, in the case of ISOs, shall not be less than 100% of the fair market
value of a share of Common Stock on the date the
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option or warrant is granted, as determined by the Committee. In the case
of an ISO granted to a Ten Percent Stockholder, the option or warrant price
shall not be less than 110% of the fair market value of a share of Common
Stock on the date the option or warrant is granted. The purchase price of
each share of Common Stock subject to a Nonqualified Option or Warrant
under this Plan shall be determined by the Committee prior to granting the
option or warrant. The Committee shall set the purchase price for each
share subject to a Nonqualified Option or Warrant at either the fair market
value of each share on the date the option or warrant is granted, or at
such other price as the Committee in its sole discretion shall determine.
At the time a determination of the fair market value of a share of Common
Stock is required to be made hereunder, the determination of its fair
market value shall be made by the Committee in such manner as it deems
appropriate.
(iii) Exercise Period. The Committee may provide in the option or warrant
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agreement that an option or warrant may be exercised in whole, immediately,
or is to be exercisable in increments. In addition, the Committee may
provide that the exercise of all or part of an option or warrant is subject
to specified performance by the Participant.
(iv) Procedure for Exercise. Options or warrants shall be exercised in the
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manner specified in the option or warrant agreement. The notice of exercise
shall specify the address to which the certificates for such shares are to
be mailed. A Participant shall be deemed to be a stockholder with respect
to shares covered by an option or warrant on the date specified in the
option or warrant agreement. As promptly as practicable, the Company shall
deliver to the Participant or other holder of the warrant, certificates for
the number of shares with respect to which such option or warrant has been
so exercised, issued in the holder's name or such other name as holder
directs; provided, however, that such delivery shall be deemed effected for
all purposes when a stock transfer agent of the Company shall have
deposited such certificates with a carrier for overnight delivery,
addressed to the holder at the address specified pursuant to this Section
6(d).
(v) Termination of Employment. If an executive officer to whom an option or
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warrant is granted ceases to be employed by the Company for any reason
other than death or disability, any option or warrant which is exercisable
on the date of such termination of employment may be exercised during a
period beginning on such date and ending at the time set forth in the
option or warrant agreement; provided, however, that if a Participant's
employment is terminated because of the Participant's theft or embezzlement
from the Company, disclosure of trade secrets of the Company or the
commission of a willful, felonious act while in the employment of the
Company (such reasons shall hereinafter be collectively referred to as "for
cause"), then any option or warrant or unexercised portion thereof granted
to said Participant shall expire upon such termination of employment.
Notwithstanding the foregoing, no ISO may be exercised later than three
months after an employee's termination of employment for any reason other
than death or disability.
(vi) Disability or Death of Participant. In the event of the determination
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of disability or
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death of a Participant under the Plan while he or she is employed by the
Company, the options or warrants previously granted to him may be exercised
(to the extent he or she would have been entitled to do so at the date of
the determination of disability or death) at any time and from time to
time, within a period beginning on the date of such determination of
disability or death and ending at the time set forth in the option or
warrant agreement, by the former employee, the guardian of his estate, the
executor or administrator of his estate or by the person or persons to whom
his rights under the option or warrant shall pass by will or the laws of
descent and distribution, but in no event may the option or warrant be
exercised after its expiration under the terms of the option or warrant
agreement. Notwithstanding the foregoing, no ISO may be exercised later
than one year after the determination of disability or death. A Participant
shall be deemed to be disabled if, in the opinion of a physician selected
by the Committee, he or she is incapable of performing services for the
Company of the kind he or she was performing at the time the disability
occurred by reason of any medically determinable physical or mental
impairment which can be expected to result in death or to be of long,
continued and indefinite duration. The date of determination of disability
for purposes hereof shall be the date of such determination by such
physician.
(vii) Assignability. An option or warrant shall not be assignable or
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otherwise transferable, in whole or in part, by a Participant except that
an option or warrant may be transferable to a member of the Participant's
immediate family or to a trust in which the Participant and members of his
immediate family are the only beneficiaries.
(viii) Incentive Stock Options. Each option or warrant agreement may
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contain such terms and provisions as the Committee may determine to be
necessary or desirable in order to qualify an option or warrant designated
as an incentive stock option.
(ix) Restricted Stock Awards. Awards of restricted stock under this Plan
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shall be subject to all the applicable provisions of this Plan, including
the following terms and conditions, and to such other terms and conditions
not inconsistent therewith, as the Committee shall determine:
(A) Awards of restricted stock may be in addition to or in lieu of
option or warrant grants. Awards may be conditioned on the attainment
of particular performance goals based on criteria established by the
Committee at the time of each award of restricted stock. During a
period set forth in the agreement (the "Restriction Period"), the
recipient shall not be permitted to sell, transfer, pledge, or
otherwise encumber the shares of restricted stock; except that such
shares may be used, if the agreement permits, to pay the option or
warrant price pursuant to any option or warrant granted under this
Plan, provided an equal number of shares delivered to the Participant
shall carry the same restrictions as the shares so used. Shares of
restricted stock shall become free of all restrictions if during the
Restriction Period, (i) the recipient dies, (ii) the recipient's
directorship, employment, or consultancy terminates by reason of
permanent disability, as determined by the Committee, (iii) the
recipient retires after attaining both 59 1/2 years of age and five
years of continuous service with the Company and/or a
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division or subsidiary, or (iv) if provided in the agreement, there is
a "change in control" of the Company (as defined in such agreement).
The Committee may require medical evidence of permanent disability,
including medical examinations by physicians selected by it. Unless
and to the extent otherwise provided in the agreement, shares of
restricted stock shall be forfeited and revert to the Company upon the
recipient's termination of directorship, employment or consultancy
during the Restriction Period for any reason other than death,
permanent disability, as determined by the Committee, retirement after
attaining both 59 1/2 years of age and five years of continuous
service with the Company and/or a subsidiary or division, or, to the
extent provided in the agreement, a "change in control" of the Company
(as defined in such agreement), except to the extent the Committee, in
its sole discretion, finds that such forfeiture might not be in the
best interests of the Company and, therefore, waives all or part of
the application of this provision to the restricted stock held by such
recipient. Certificates for restricted stock shall be registered in
the name of the recipient but shall be imprinted with the appropriate
legend and returned to the Company by the recipient, together with a
stock power endorsed in blank by the recipient. The recipient shall be
entitled to vote shares of restricted stock and shall be entitled to
all dividends paid thereon, except that dividends paid in Common Stock
or other property shall also be subject to the same restrictions.
(B) Restricted Stock shall become free of the foregoing restrictions
upon expiration of the applicable Restriction Period and the Company
shall then deliver to the recipient Common Stock certificates
evidencing such stock. Restricted stock and any Common Stock received
upon the expiration of the restriction period shall be subject to such
other transfer restrictions and/or legend requirements as are
specified in the applicable agreement.
(x) Bonuses and Past Salaries and Fees Payable in Unrestricted Stock.
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(A) In lieu of cash bonuses otherwise payable under the Company's or
applicable division's or subsidiary's compensation practices to
employees and consultants eligible to participate in this Plan, the
Committee, in its sole discretion, may determine that such bonuses
shall be payable in unrestricted Common Stock or partly in
unrestricted Common Stock and partly in cash. Such bonuses shall be in
consideration of services previously performed and as an incentive
toward future services and shall consist of shares of unrestricted
Common Stock subject to such terms as the Committee may determine in
its sole discretion. The number of shares of unrestricted Common Stock
payable in lieu of a bonus otherwise payable shall be determined by
dividing such bonus amount by the fair market value of one share of
Common Stock on the date the bonus is payable, with fair market value
determined as of such date in accordance with Section 5(d)(ii).
(B) In lieu of salaries and fees otherwise payable by the Company to
employees, attorneys and consultants eligible to participate in this
Plan that were incurred for services rendered during, prior or after
the year of 2003, the Committee, in its sole
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discretion, may determine that such unpaid salaries and fees shall be
payable in unrestricted Common Stock or partly in unrestricted Common
Stock and partly in cash. Such awards shall be in consideration of
services previously performed and as an incentive toward future
services and shall consist of shares of unrestricted Common Stock
subject to such terms as the Committee may determine in its sole
discretion. The number of shares of unrestricted Common Stock payable
in lieu of salaries and fees otherwise payable shall be determined by
dividing each calendar month's of unpaid salary or fee amount by the
average trading value of the Common Stock for the calendar month
during which the subject services were provided.
(xi) No Rights as Stockholder. No Participant shall have any rights as a
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stockholder with respect to shares covered by an option or warrant until
the option or warrant is exercised as provided in clause (d) above.
(xii) Extraordinary Corporate Transactions. The existence of outstanding
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options or warrants shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
recapitalizations, reorganizations, exchanges, or other changes in the
Company's capital structure or its business, or any merger or consolidation
of the Company, or any issuance of Common Stock or other securities or
subscription rights thereto, or any issuance of bonds, debentures,
preferred or prior preference stock ahead of or affecting the Common Stock
or the rights thereof, or the dissolution or liquidation of the Company, or
any sale or transfer of all or any part of its assets or business, or any
other corporate act or proceeding, whether of a similar character or
otherwise. If the Company recapitalizes or otherwise changes its capital
structure, or merges, consolidates, sells all of its assets or dissolves
(each of the foregoing a "Fundamental Change"), then thereafter upon any
exercise of an option or warrant theretofore granted the Participant shall
be entitled to purchase under such option or warrant, in lieu of the number
of shares of Common Stock as to which option or warrant shall then be
exercisable, the number and class of shares of stock and securities to
which the Participant would have been entitled pursuant to the terms of the
Fundamental Change if, immediately prior to such Fundamental Change, the
Participant had been the holder of record of the number of shares of Common
Stock as to which such option or warrant is then exercisable. If (i) the
Company shall not be the surviving entity in any merger or consolidation
(or survives only as a subsidiary of another entity), (ii) the Company
sells all or substantially all of its assets to any other person or entity
(other than a wholly owned subsidiary), (iii) any person or entity
(including a "group" as contemplated by Section 13(d)(3) of the Exchange
Act) acquires or gains ownership or control of (including, without
limitation, power to vote) more than 50% of the outstanding shares of
Common Stock, (iv) the Company is to be dissolved and liquidated, or (v) as
a result of or in connection with a contested election of directors, the
persons who were directors of the Company before such election shall cease
to constitute a majority of the Board (each such event in clauses (i)
through (v) above is referred to herein as a "Corporate Change"), the
Committee, in its sole discretion, may accelerate the time at which all or
a portion of a Participant's option or warrants may be exercised for a
limited period of time before or after a specified date.
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(xiii) Changes in Company's Capital Structure. If the outstanding shares of
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Common Stock or other securities of the Company, or both, for which the
option or warrant is then exercisable at any time be changed or exchanged
by declaration of a stock dividend, stock split, combination of shares,
recapitalization, or reorganization, the number and kind of shares of
Common Stock or other securities which are subject to the Plan or subject
to any options or warrants theretofore granted, and the option or warrant
prices, shall be adjusted only as provided in the option or warrant.
(xiv) Acceleration of Options and Warrants. Except as hereinbefore
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expressly provided, (i) the issuance by the Company of shares of stock or
any class of securities convertible into shares of stock of any class, for
cash, property, labor or services, upon direct sale, upon the exercise of
rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other
securities, (ii) the payment of a dividend in property other than Common
Stock or (iii) the occurrence of any similar transaction, and in any case
whether or not for fair value, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of shares of
Common Stock subject to options or warrants theretofore granted or the
purchase price per share, unless the Committee shall determine, in its sole
discretion, that an adjustment is necessary to provide equitable treatment
to Participant. Notwithstanding anything to the contrary contained in this
Plan, the Committee may, in its sole discretion, accelerate the time at
which any option or warrant may be exercised, including, but not limited
to, upon the occurrence of the events specified in this Section 5, and is
authorized at any time (with the consent of the Participant) to purchase
options or warrants pursuant to Section 6.
SECTION 6. RELINQUISHMENT OF OPTIONS OR WARRANTS.
(a) The Committee, in granting options or warrants hereunder, shall have
discretion to determine whether or not options or warrants shall include a right
of relinquishment as hereinafter provided by this Section 6. The Committee
shall also have discretion to determine whether an option or warrant agreement
evidencing an option or warrant initially granted by the Committee without a
right of relinquishment shall be amended or supplemented to include such a right
of relinquishment. Neither the Committee nor the Company shall be under any
obligation or incur any liability to any person by reason of the Committee's
refusal to grant or include a right of relinquishment in any option or warrant
granted hereunder or in any option or warrant agreement evidencing the same.
Subject to the Committee's determination in any case that the grant by it of a
right of relinquishment is consistent with Section 1 hereof, any option or
warrant granted under this Plan, and the option or warrant agreement evidencing
such option or warrant, may provide:
(i) That the Participant, or his or her heirs or other legal
representatives to the extent entitled to exercise the option or warrant
under the terms thereof, in lieu of purchasing the entire number of shares
subject to purchase thereunder, shall have the right to relinquish all or
any part of the then unexercised portion of the option or warrant (to the
extent then exercisable) for a number of shares of Common Stock to be
determined in accordance with the following provisions of this clause (i):
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(A) The written notice of exercise of such right of relinquishment
shall state the percentage of the total number of shares of Common
Stock issuable pursuant to such relinquishment (as defined below) that
the Participant elects to receive;
(B) The number of shares of Common Stock, if any, issuable pursuant to
such relinquishment shall be the number of such shares, rounded to the
next greater number of full shares, as shall be equal to the quotient
obtained by dividing (i) the Appreciated Value by (ii) the purchase
price for each of such shares specified in such option or warrant;
(C) For the purpose of this clause (C), "Appreciated Value" means the
excess, if any, of (x) the total current market value of the shares of
Common Stock covered by the option or warrant or the portion thereof
to be relinquished over (y) the total purchase price for such shares
specified in such option or warrant;
(ii) That such right of relinquishment may be exercised only upon receipt
by the Company of a written notice of such relinquishment which shall be
dated the date of election to make such relinquishment; and that, for the
purposes of this Plan, such date of election shall be deemed to be the date
when such notice is sent by registered or certified mail, or when receipt
is acknowledged by the Company, if mailed by other than registered or
certified mail or if delivered by hand or by any telegraphic communications
equipment of the sender or otherwise delivered; provided, that, in the
event the method just described for determining such date of election shall
not be or remain consistent with the provisions of Section 16(b) of the
Exchange Act or the rules and regulations adopted by the Commission
thereunder, as presently existing or as may be hereafter amended, which
regulations exempt from the operation of Section 16(b) of the Exchange Act
in whole or in part any such relinquishment transaction, then such date of
election shall be determined by such other method consistent with Section
16(b) of the Exchange Act or the rules and regulations thereunder as the
Committee shall in its discretion select and apply;
(iii) That the "current market value" of a share of Common Stock on a
particular date shall be deemed to be its fair market value on that date as
determined in accordance with Paragraph 5(d)(ii); and
(iv) That the option or warrant, or any portion thereof, may be
relinquished only to the extent that (A) it is exercisable on the date
written notice of relinquishment is received by the Company, and (B) the
holder of such option or warrant pays, or makes provision satisfactory to
the Company for the payment of, any taxes which the Company is obligated to
collect with respect to such relinquishment.
(b) The Committee shall have sole discretion to consent to or disapprove, and
neither the Committee nor the Company shall be under any liability by reason of
the Committee's disapproval of, any election by a holder of options or warrants
to relinquish such options or warrants in whole or in part as provided in
Paragraph 6(a), except that no such consent to or
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approval of a relinquishment shall be required under the following
circumstances. Each Participant who is subject to the short-swing profits
recapture provisions of Section 16(b) of the Exchange Act ("Covered
Participant") shall not be entitled to receive shares of Common Stock when
options or warrants are relinquished during any window period commencing on the
third business day following the Company's release of a quarterly or annual
summary statement of sales and earnings and ending on the twelfth business day
following such release ("Window Period"). A Covered Participant shall be
entitled to receive shares of Common Stock upon the relinquishment of options or
warrants outside a Window Period.
(c) The Committee, in granting options or warrants hereunder, shall have
discretion to determine the terms upon which such options or warrants shall be
relinquishable, subject to the applicable provisions of this Plan, and including
such provisions as are deemed advisable to permit the exemption from the
operation from Section 16(b) of the Exchange Act of any such relinquishment
transaction, and options or warrants outstanding, and option agreements
evidencing such options, may be amended, if necessary, to permit such exemption.
If options or warrants are relinquished, such option or warrant shall be deemed
to have been exercised to the extent of the number of shares of Common Stock
covered by the option or warrant or part thereof which is relinquished, and no
further options or warrants may be granted covering such shares of Common Stock.
(d) Any options or warrants or any right to relinquish the same to the Company
as contemplated by this Paragraph 6 shall be assignable by the Participant,
provided the transaction complies with any applicable securities laws.
(e) Except as provided in Section 6(f) below, no right of relinquishment may be
exercised within the first six months after the initial award of any option or
warrant containing, or the amendment or supplementation of any existing option
or warrant agreement adding, the right of relinquishment.
(f) No right of relinquishment may be exercised after the initial award of any
option or warrant containing, or the amendment or supplementation of any
existing option or warrant agreement adding the right of relinquishment, unless
such right of relinquishment is effective upon the Participant's death,
disability or termination of his relationship with the Company for a reason
other than "for cause."
SECTION 7. AMENDMENTS OR TERMINATION. The Board may amend, alter or
discontinue the Plan, but no amendment or alteration shall be made which would
impair the rights of any Participant, without his consent, under any option or
warrant theretofore granted.
SECTION 8. COMPLIANCE WITH OTHER LAWS AND REGULATIONS. The Plan, the grant and
exercise of options or warrants thereunder, and the obligation of the Company to
sell and deliver shares under such options or warrants, shall be subject to all
applicable federal and state laws, rules and regulations and to such approvals
by any governmental or regulatory agency as may be required. The Company shall
not be required to issue or deliver any certificates for shares of Common Stock
prior to the completion of any registration or qualification of such shares
under any federal or state law or issuance of any ruling or regulation
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of any government body which the Company shall, in its sole discretion,
determine to be necessary or advisable. Any adjustments provided for in
subparagraphs 5(d)(xii), (xiii) and (xiv) shall be subject to any shareholder
action required by the corporate law of the state of incorporation of the
Company.
SECTION 9. PURCHASE FOR INVESTMENT. Unless the options, warrants, and shares
of Common Stock covered by this Plan have been registered under the Securities
Act of 1933, as amended, or the Company has determined that such registration is
unnecessary, each person acquiring or exercising an option or warrant under this
Plan may be required by the Company to give a representation in writing that he
or she is acquiring such option or warrant or such shares for his own account
for investment and not with a view to, or for sale in connection with, the
distribution of any part thereof.
SECTION 10. TAXES.
(a) The Company may make such provisions as it may deem appropriate for the
withholding of any taxes which it determines is required in connection with any
options or warrants granted under this Plan.
(b) Notwithstanding the terms of Paragraph 10(a), any Participant may pay all or
any portion of the taxes required to be withheld by the Company or paid by him
or her in connection with the exercise of a nonqualified option or warrant by
electing to have the Company withhold shares of Common Stock, or by delivering
previously owned shares of Common Stock, having a fair market value, determined
in accordance with Paragraph 5(d)(ii), equal to the amount required to be
withheld or paid. A Participant must make the foregoing election on or before
the date that the amount of tax to be withheld is determined ("Tax Date"). All
such elections are irrevocable and subject to disapproval by the Committee.
Elections by Covered Participants are subject to the following additional
restrictions: (i) such election may not be made within six months of the grant
of an option or warrant, provided that this limitation shall not apply in the
event of death or disability, and (ii) such election must be made either six
months or more prior to the Tax Date or in a Window Period. Where the Tax Date
in respect of an option or warrant is deferred until six months after exercise
and the Covered Participant elects share withholding, the full amount of shares
of Common Stock will be issued or transferred to him upon exercise of the option
or warrant, but he or she shall be unconditionally obligated to tender back to
the Company the number of shares necessary to discharge the Company's
withholding obligation or his estimated tax obligation on the Tax Date.
SECTION 11. REPLACEMENT OF OPTIONS AND WARRANTS. The Committee from time to
time may permit a Participant under the Plan to surrender for cancellation any
unexercised outstanding option or warrant and receive from the Company in
exchange an option or warrant for such number of shares of Common Stock as may
be designated by the Committee. The Committee may, with the consent of the
holder of any outstanding option or warrant, amend such option or warrant,
including reducing the exercise price of any option or warrant to not less than
the fair market value of the Common Stock at the time of the amendment and
extending the exercise term of any warrant or option.
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SECTION 12. NO RIGHT TO COMPANY EMPLOYMENT. Nothing in this Plan or as a
result of any option or warrant granted pursuant to this Plan shall confer on
any individual any right to continue in the employ of the Company or interfere
in any way with the right of the Company to terminate an individual's employment
at any time. The option or warrant agreements may contain such provisions as
the Committee may approve with reference to the effect of approved leaves of
absence.
SECTION 13. LIABILITY OF COMPANY. The Company and any Affiliate which is in
existence or hereafter comes into existence shall not be liable to a Participant
or other persons as to:
(a) The Non-Issuance of Shares. The non-issuance or sale of shares as to which
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the Company has been unable to obtain from any regulatory body having
jurisdiction the authority deemed by the Company's counsel to be necessary to
the lawful issuance and sale of any shares hereunder; and
(b) Tax Consequences. Any tax consequence expected, but not realized, by any
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Participant or other person due to the exercise of any option or warrant granted
hereunder.
SECTION 14. EFFECTIVENESS AND EXPIRATION OF PLAN. The Plan shall be effective
on the date the Board adopts the Plan. The Plan shall expire ten years after
the date the Board approves the Plan and thereafter no option or warrant shall
be granted pursuant to the Plan.
SECTION 15. NON-EXCLUSIVITY OF THE PLAN. Neither the adoption by the Board nor
the submission of the Plan to the stockholders of the Company for approval shall
be construed as creating any limitations on the power of the Board to adopt such
other incentive arrangements as it may deem desirable, including without
limitation, the granting of restricted stock or stock options or warrants
otherwise than under the Plan, and such arrangements may be either generally
applicable or applicable only in specific cases.
SECTION 16. GOVERNING LAW. This Plan and any agreements hereunder shall be
interpreted and construed in accordance with the laws of the state of
incorporation of the Company and applicable federal law.
SECTION 17. CASHLESS EXERCISE. The Committee also may allow cashless exercises
as permitted under Federal Reserve Board's Regulation T, subject to applicable
securities law restrictions, or by any other means which the Committee
determines to be consistent with the Plan's purpose and applicable law. The
proceeds from such a payment shall be added to the general funds of the Company
and shall be used for general corporate purposes.
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