Exhibit 99
eDiets.com, Inc.
STOCK OPTION PLAN
(As Amended and Restated Effective April 1, 2002)
I. PURPOSE AND DEFINITIONS
A. PURPOSE OF THE PLAN
The Plan is intended to encourage ownership of Shares by Key Employees and Key
Non-Employees in order to attract and retain such Key Employees in the employ of
the Company or an Affiliate, or to attract such Key Non-Employees to provide
services to the Company or an Affiliate, and to provide additional incentive for
such persons to promote the success of the Company or an Affiliate.
B. DEFINITIONS
Unless otherwise specified or unless the context otherwise requires, the
following terms, as used in this Plan, have the following meanings:
1. AFFILIATE means a corporation that, for purposes of Section 422 of the
Code, is a parent or subsidiary of the Company, directly or indirectly.
2. BOARD means the Board of Directors of the Company.
3. CODE means the Internal Revenue Code of 1986, as amended.
4. COMMITTEE means the committee to which the Board delegates the power to act
under or pursuant to the provisions of the Plan, or the Board if no
committee is selected. If the Board delegates powers to a committee, and
if the Company is or becomes subject to Section 16 of the Exchange Act,
then, if necessary for compliance therewith, such committee shall consist
initially of not less than two (2) members of the Board, each member of
which must be a "Non-Employee director," within the meaning of the
applicable rules promulgated pursuant to the Exchange Act. The failure of
any Committee members to qualify as a "Non-Employee director" shall not
otherwise affect the validity of the grant of an option, or the issuance of
shares of Common Stock otherwise validly issued upon exercise of any such
option. If the Company is or becomes subject to Section 16 of the Exchange
Act, no member of the Committee shall receive any Option pursuant to the
Plan or any similar plan of the Company or any Affiliate while serving on
the Committee unless the Board determines that the grant of such an Option
satisfies the then current Rule 16b-3 requirements under the Exchange Act.
Notwithstanding anything herein to the contrary, and insofar as the Board
determines that it is necessary in order for compensation recognized by
Participants pursuant to the Plan to be fully deductible to the Company for
federal income tax purposes, each member of
the Committee also shall be an "outside director" (as defined in
regulations or other guidance issued by the Internal Revenue Service under
Code Section 162(m)).
5. COMPANY means eDiets.com, Inc., a Delaware corporation, and includes any
successor or assignee corporation or corporations into which the Company
may be merged, changed, or consolidated; any corporation for whose
securities the securities of the Company shall be exchanged; and any
assignee of or successor to substantially all of the assets of the Company.
6. DISABILITY or DISABLED means permanent and total disability as defined in
Section 22(e)(3) of the Code.
7. EXCHANGE ACT means the Securities Exchange Act of 1934, as amended from
time to time, or any successor statute thereto.
8. FORMULA OPTION means a Nonstatutory Option granted automatically to a Non-
Employee Board Member in accordance with Article IV of the Plan.
9. INCENTIVE OPTION means an Option which, when granted, is intended to be an
"incentive stock option," as defined in Section 422 of the Code.
10. KEY EMPLOYEE means an employee of the Company or of an Affiliate
(including, without limitation, an employee who also is serving as any
officer or director of the Company or of an Affiliate), designated by the
Board or the Committee as being eligible to be granted one or more Options
under the Plan.
11. KEY NON-EMPLOYEE means a Non-Employee Board Member, consultant, or
independent contractor of the Company or of an Affiliate who is designated
by the Board or the Committee as being eligible to be granted one or more
Options under the Plan.
12. NON-EMPLOYEE BOARD MEMBER means a director of the Company who is not an
employee of the Company or any of its Affiliates. For purposes of this
Plan, a Non-Employee Board Member shall be deemed to include the employer
of such Non-Employee Board Member, if the Non-Employee Board Member is so
required, as a condition of his employment, to provide that any Option
granted hereunder be made to the employer.
13. NONSTATUTORY OPTION means an Option which, when granted, is not intended to
be an "incentive stock option," as defined in Section 422 of the Code.
14. OPTION means a right or option granted under the Plan.
15. OPTION AGREEMENT means an agreement between the Company and a participant
executed and delivered pursuant to the Plan.
16. PARTICIPANT means a Key Employee to whom one or more Incentive Options or
Nonstatutory Options are granted under the Plan, and a Key Non-Employee to
whom one or more Nonstatutory Options are granted under the Plan.
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17. PLAN means this Stock Option Plan, as amended from time to time.
18. SHARES means the following shares of the capital stock of the Company as to
which Options have been or may be granted under the Plan: treasury shares
or authorized but unissued Common Stock, $.001 par value, or any shares of
capital stock into which the Shares are changed or for which they are
exchanged within the provisions of Article VII of the Plan.
II. SHARES SUBJECT TO THE PLAN
The aggregate number of Shares as to which Options may be granted from time
to time shall be 5,000,000 Shares (subject to adjustment for stock splits,
stock dividends, and other adjustments described in Article VII hereof).
The maximum number of Shares as to which Options may be granted in any
calendar year to any one Key Employee shall not exceed 1,000,000 (subject
to adjustment for stock splits, stock dividends and other adjustments
described in Article VII hereof).
If an Option ceases to be "outstanding," in whole or in part, the Shares
that were subject to such Option, if the Option was not exercised, shall be
available for the granting of other Options. Any Option shall be treated
as "outstanding" until such Option is exercised in full, terminates or
expires under the provisions of the Plan or Option Agreement, or is
canceled by agreement of the Company and the Participant.
Subject to the provisions of Article VII, the aggregate number of Shares as
to which Incentive Options may be granted shall be subject to change only
by means of an amendment of the Plan duly adopted by the Company and
approved by the stockholders of the Company within one year before or after
the date of the adoption of any such amendment.
III. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee. A majority of the
Committee shall constitute a quorum at any meeting thereof (including by
telephone conference) and the acts of a majority of the members present, or
acts approved in writing by a majority of the entire Committee without a
meeting, shall be the acts of the Committee for purposes of this Plan. The
Committee may authorize one or more of its members or an officer of the
Company to execute and deliver documents on behalf of the Committee. A
member of the Committee shall not exercise any discretion respecting
himself or herself under the Plan. The Board shall have the authority to
remove, replace or fill any vacancy of any member of the Committee upon
notice to the Committee and the affected member. Any member of the
Committee may resign upon notice to the Board. The Committee may allocate
among one or more of its members, or may delegate to one or more of its
agents, such duties and responsibilities as it determines.
Subject to the provisions of the Plan, the Committee is authorized to:
A. interpret the provisions of the Plan or of any Option or Option
Agreement and to make all rules and determinations which it deems
necessary or advisable for the
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administration of the Plan;
B. determine which employees of the Company or of an Affiliate shall be
designated as Key Employees and which of the Key Employees shall be
granted Options;
C. determine the Key Non-Employees to whom Nonstatutory Options shall be
granted;
D. determine whether the Option to be granted to a Key Employee shall be
an Incentive Option or Nonstatutory Option;
E. determine the number of Shares for which an Option or Options shall be
granted;
F. provide for the acceleration of the right to exercise an Option (or
portion thereof); and
G. specify the terms and conditions upon which Options may be granted;
provided, however, that with respect to Incentive Options, all such
interpretations, rules, determinations, terms, and conditions shall be made
and prescribed in the context of preserving the tax status of the Incentive
Options as incentive stock options within the meaning of Section 422 of the
Code.
All determinations of the Committee shall be reduced to writing and signed
by or on behalf of the Committee. No member of the Committee shall be
liable for any action or determination made in good faith with respect to
the Plan or any Option.
IV. ELIGIBILITY FOR PARTICIPATION
The Committee may at any time and from time to time grant one or more
Options to one or more Key Employees or Key Non-Employees and may designate
the number of Shares to be subject to each Option so granted, provided,
however, that (i) each Participant receiving an Incentive Option must be a
Key Employee of the Company or of an Affiliate at the time an Incentive
Option is granted; (ii) no Incentive Options shall be granted after the
expiration of ten (10) years from the earlier of the, date of the adoption
of the Plan by the Company or the approval of the Plan by the stockholders
of the Company; and (iii) the fair market value of the Shares (determined
at the time the Option is granted) as to which Incentive Options are
exercisable for the first time by any Key Employee during any single
calendar year (under the Plan and under all other incentive option plan of
the Company or an Affiliate) shall not exceed $100,000.
Notwithstanding any of the foregoing provisions, the Committee may
authorize the grant of an Option to a person not then in the employ of or
serving as a Non-Employee Board Member, consultant, or independent
contractor of the Company or of an Affiliate, conditioned upon such person
becoming eligible to become a Participant at or prior to the execution of
the Option Agreement evidencing the actual grant of such Option.
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V. TERMS AND CONDITIONS OF OPTIONS
Each Option shall be set forth in an Option Agreement, duly executed on
behalf of the Company and by the Participant to whom such Option is
granted. Except for the setting of the Option price under Paragraph A, no
Option shall be granted and no purported grant of any Option shall be
effective until such Option Agreement shall have been duly executed on
behalf of the Company and by the Participant. Each such Option Agreement
shall be subject to at least the following terms and conditions:
A. OPTION PRICE
Except with respect to Formula Options as set forth in Article VI, the
exercise price of the Option covered by each Option granted under the Plan
shall be determined by the Committee. The Option price per share shall be
such amount as may be determined by the Committee in its sole discretion on
the date of the grant of the Option. In the case of an Incentive Option,
if the optionee owns directly or by reason of the applicable attribution
rules ten percent (10%) or less of the total combined voting power of all
classes of share capital of the Company, the Option price (per share) of
the Shares covered by each Incentive Option shall be not less than the
"fair market value" of the Shares on the date of the grant of the Incentive
Option. In all other cases of Incentive Options, the Option price shall be
not less than one hundred ten percent (110%) of the said fair market value
on the date of grant. If the Shares are listed on any national securities
exchange, the fair market value shall be the mean average of the "high" and
"low" prices, if any, on the largest such exchange on the date of the grant
of the Option, or, if none, on the most recent trade date thirty (30) days
or less prior to the date of the grant of the Option. If the Shares are
not then listed on any such exchange, the fair market value of such Shares
shall be the mean average of the "high" and the "low" prices, if any, as
reported on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") for the date of the grant of the Option, or if
none, on the most recent trade date thirty (30) days or less prior to the
date of the grant of the Option for which such quotations are reported. If
the Shares are not then either listed on any such exchange or quoted on
NASDAQ, the fair market value shall be the mean between the "high" and the
"low" prices, if any, as reported in the National Daily Quotation Service
for the date of the grant of the Option, or, if none, for the most recent
trade date thirty (30) days or less prior to the date of the grant of the
Option for which such quotations are reported. If the fair market value
cannot be determined under the preceding three sentences, it shall be
determined in good faith by the Committee.
B. NUMBER OF SHARES
Each Option shall state the number of Shares to which it pertains.
C. TERM OF OPTION
Each Incentive Option shall terminate not more than ten (10) years from the
date of the grant thereof, or at such earlier time as the Option Agreement
may provide, and shall be subject to earlier termination as herein
provided, except that if the Option price is
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required under Paragraph A of this Article V to be at least one hundred ten
percent (110%) of fair market value, each such Incentive Option shall
terminate not more than five (5) years from the date of the grant thereof,
and shall be subject to earlier termination as herein provided.
D. DATE OF EXERCISE
Upon the authorization of the grant of an Option, or at any time
thereafter, the Committee may, subject to the provisions of Paragraph C of
this Article V, prescribe the date or dates on which the Option becomes
exercisable, and may provide that the option rights become exercisable in
installments over a period of years, or upon the attainment of stated
goals.
E. MEDIUM OF PAYMENT
The Option price shall be paid on the date of purchase specified in the
notice of exercise, as set forth in Paragraph I. It shall be paid in such
form (permitted by Section 422 of the Code in the case of Incentive
Options) as the Committee shall, either by rules promulgated pursuant to
the provisions of Article III of the Plan, or in the particular Option
Agreement, provide.
F. TERMINATION OF EMPLOYMENT
1. A Participant who ceases to be an employee or Key Non-Employee of the
Company or of an Affiliate for any reason other than death, Disability, or
termination for cause, may exercise any Option granted to such Participant,
to the extent that the right to purchase Shares thereunder has become
exercisable on the date of such termination, but only within three (3)
months after such date or such greater period of time as the Board or the
Committee in their sole discretion shall determine, or, if earlier, within
the originally prescribed term of the Option, and subject to the condition
that no Option shall be exercisable after the expiration of the term of the
Option. A Participant's employment shall not be deemed terminated by
reason of a transfer to another employer that is the Company or an
Affiliate.
2. A Participant who ceases to be an employee or Key Non-Employee for cause
shall, upon such termination, cease to have any right to exercise any
Option. For purposes of this Plan, unless otherwise provided in an
employment agreement with a Participant, cause shall be deemed to include
(but shall not be limited to) wrongful appropriation of funds of the
Company or an Affiliate, divulging confidential information about the
Company or an Affiliate to the public, the commission of a gross
misdemeanor or felony, or the performance of any similar action that the
Board and the Committee, in their sole discretion, may deem to be
sufficiently injurious to the interests of the Company or an Affiliate to
constitute substantial cause for termination. The determination of the
Board or the Committee as to the existence of cause shall be conclusive and
binding upon the Participant and the Company.
3. A Participant who is absent from work with the Company or an Affiliate
because of temporary disability (any disability other than a permanent and
total Disability as defined at Paragraph B(6) of Article I hereof), or who
is on leave of absence for any purpose
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permitted by any authoritative interpretation (i.e., regulation, ruling,
case law, etc.) of Section 422 of the Code, shall not, during the period of
any such absence, be deemed, by virtue of such absence alone, to have
terminated his employment or relationship with the Company or with an
Affiliate, except as the Committee may otherwise expressly provide or
determine.
4. Paragraph F(1) shall control and fix the rights of a Participant who ceases
to be an employee or Key Non-Employee of the Company or of an Affiliate for
any reason other than death, Disability, or termination for cause, and who
subsequently becomes Disabled or dies. Nothing in Paragraphs G and H of
this Article V shall be applicable in any such case except that, in the
event of such a subsequent Disability or death within the three (3) month
period after the termination of employment or, if earlier, within the
originally prescribed term of the Option, the Participant or the
Participant's estate or personal representative may exercise the Option
permitted by this Paragraph F, in the event of Disability, within twelve
(12) months after the date that the Participant ceased to be an employee or
Key Non-Employee of the Company or of an Affiliate or, in the event of
death, within twelve (12) months after the date of death of such
Participant; provided, however, that in no event may the Option be
exercised beyond its originally prescribed term.
G. TOTAL AND PERMANENT DISABILITY
A Participant who ceases to be an employee or Key Non-Employee of the
Company or of an Affiliate by reason of Disability may exercise any Option
granted to such Participant (i) to the extent that the right to purchase
Shares thereunder has become exercisable on or before the date such
Participant becomes Disabled as determined by the Committee, and (ii) if
the Option becomes exercisable periodically under Paragraph D, to the
extent of any additional rights that would have become exercisable had the
participant not become so disabled until after the close of business on the
next periodic exercise date.
A Disabled Participant shall exercise such rights, if at all, only within a
period of not more than twelve (12) months, or such greater period of time
as the Board or the Committee in their sole discretion shall determine,
after the date that the Participant became Disabled as determined by the
Committee (notwithstanding that the Participant might have been able to
exercise the Option as to some or all of the Shares on a later date if the
Participant had not become Disabled) or, if earlier, within the originally
prescribed term of the Option.
H. DEATH
In the event that a Participant to whom an Option has been granted ceases
to be an employee or Key Non-Employee of the Company or of an Affiliate by
reason of such Participant's death, such Option, to the extent that the
right is exercisable but not exercised on the date of death, may be
exercised by the Participant's estate or personal representative within
twelve (12) months, or such greater period of time as the Board or the
Committee in their sole discretion shall determine, after the date of death
of such Participant or, if earlier, within the originally prescribed term
of the Option,
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notwithstanding that the decedent might have been able to exercise the
Option as to some or all of the Shares on a later date if the participant
were alive and had continued to be an employee or Key Non-Employee of the
Company or of an Affiliate.
I. EXERCISE OF OPTION AND ISSUANCE OF STOCK
Options shall be exercised by giving written notice to the Company. Such
written notice shall: (1) be signed by the person exercising the Option,
(2) state the number of Shares with respect to which the Option is being
exercised, (3) contain the warranty required by Paragraph M of this Article
V, and (4) specify a date (other than a Saturday, Sunday or legal holiday)
not less than five (5) nor more than ten (10) days after the date of such
written notice, as the date on which the Shares will be purchased. Such
tender and conveyance shall take place at the principal office of the
Company during ordinary business hours, or at such other hour and place
agreed upon by the Company and the person or persons exercising the Option.
On the date specified in such written notice (which date may be extended by
the Company in order to comply with any law or regulation, which requires
the Company to take any action with respect to the Option Shares prior to
the issuance thereof, whether pursuant to the provisions of Article VII or
otherwise), the Company shall accept payment for the Option Shares and
shall deliver to the person or persons exercising the Option in exchange
therefor an appropriate certificate or certificates for fully paid non-
assessable Shares.
J. RIGHTS AS A STOCKHOLDER
No Participant to whom an Option has been granted shall have rights as a
stockholder with respect to any Shares covered by such Option except as to
such Shares as have been issued to or registered in the Company's share
register in the name of such Participant upon the due exercise of the
Option and tender of the full Option price.
K. ASSIGNABILITY AND TRANSFERABILITY OF OPTION
Unless otherwise permitted by the Code and by Rule 16b-3 of the Exchange
Act, if applicable, and approved in advance by the Committee, an Option
granted to a Participant shall not be transferable by the participant and
shall be exercisable, during the Participant's lifetime, only by such
Participant or, in the event of the Participant's incapacity, his guardian
or legal representative. Except as otherwise permitted herein, such Option
shall not be assigned, pledged or hypothecated in any way (whether by
operation of law or otherwise) and shall not be subject to execution,
attachment, or similar process. Any attempted transfer, assignment,
pledge, hypothecation or other disposition of any Option or of any rights
grazed thereunder contrary to the provisions of this Paragraph K, or the
levy of any attachment or similar process upon an option or such rights,
shall be null and void.
L. OTHER PROVISIONS
The Option Agreement for an Incentive Option shall contain such limitations
and restrictions upon the exercise of the Option as shall be necessary in
order that such Option be treated as an "incentive stock option" within the
meaning of Section 422 of the
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Code. Further, the Option Agreements authorized under the Plan shall be
subject to such other terms and conditions including, without limitation,
restrictions upon the exercise of the Option, as the Committee shall deem
advisable and which, in the case of incentive Options, are not inconsistent
with the requirements of Section 422 of the Code.
M. PURCHASE FOR INVESTMENT
Unless the Shares to be issued upon the particular exercise of an Option
shall have been effectively registered under the Securities Act of 1933, as
now in force or hereafter amended, the Company shall be under no obligation
to issue the Shares covered by such exercise unless and until the following
conditions have been fulfilled. In accordance with the direction of the
Committee, the persons who exercise such Option shall warrant to the
Company that, at the time of such exercise, such persons are acquiring
their Option Shares for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares, and shall make such
other representations, warranties, acknowledgments and affirmations, if
any, as the Committee may require. In such event, the persons acquiring
such Shares shall be bound by the provisions of the following legend (or
similar legend) which shall be endorsed upon the certificate(s) evidencing
their Option Shares issued pursuant to such exercise:
"The shares represented by this certificate have been acquired for
investment and they may not be sold or otherwise transferred by any person,
including a pledgee, in the absence of an effective registration statement
for the shares under the Securities Act of 1933 or an opinion of counsel
satisfactory to the Company that an exemption from registration is then
available."
Without limiting the generality of the foregoing, the Company may delay
issuance of the Shares until completion of any action or obtaining any
consent that the Company deems necessary under any applicable law
(including without limitation state securities or "blue sky" laws).
VI. FORMULA OPTIONS
A. BOARD OPTIONS
Each Non-Employee Board Member shall be granted automatically a Formula
Option to purchase 25,000 Shares, as of the date of his or her election, at
an exercise price set forth in Section B herein; provided, however, that if
the effective date of such election is other than the date of an annual
meeting of the stockholders of the Company, the number of Shares covered by
the Formula Option granted as of such effective date shall be equal to
25,000 multiplied by a fraction, the numerator of which 365 minus the
number of days elapsed between the last such annual meeting and such
effective date, and the denominator of which is 365. On the date of each
subsequent annual meeting of the stockholders of the Company, the Non-
Employee Board Member shall be entitled to an automatic renewal grant of
25,000 Formula Options, at an exercise price set forth in Section B herein,
provided such individual is reelected as a Non-Employee Board Member at
such meeting. Each Formula Option granted pursuant to this Paragraph VI.A.
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shall be fully exercisable on the date of grant for a period of five (5)
years from the date of grant.
B. EXERCISE PRICE
The purchase price of the Shares subject to the Formula Options granted as
of the Effective Date of the Plan shall be $2.00 per share. The purchase
price of the Shares subject to the Formula Options granted subsequent to
the Effective Date hereunder shall be equal to one hundred percent (100%)
of the fair market value as of the date of grant, with such fair market
value to be determined as set forth in Article V.
C. TERMS AND CONDITIONS
Formula Options shall be evidenced by an Option Agreement that shall
conform, to the requirements of the Plan, and may contain such other
provisions not inconsistent therewith, as the Committee shall deem
advisable. The provisions of Article V governing Nonstatutory Options, and
the exercise and issuance thereof, shall apply to Formula Options to the
extent such provisions are not inconsistent with this Article VI.
VII. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION;
SALE OF COMPANY SHARES
In the event that the outstanding Shares of the Company are changed into or
exchanged for a different number or kind of shares or other securities of
the Company or of another corporation by reason of any reorganization,
merger, consolidation, recapitalization, reclassification, change in par
value, stock split-up, combination of shares or dividend payable in capital
stock, or the like, appropriate adjustments to prevent dilution or
enlargement of the rights granted to, or available for, Participants shall
be made in the manner and kind of shares for the purchase of which Options
may be granted under the Plan, and, in addition, appropriate adjustment
shall be made in the number and kind of Shares and in the Option price per
share subject to outstanding Options. No such adjustment shall be made
which shall, within the meaning of Section 424 of the Code, constitute such
a modification, extension, or renewal of an Option as to cause the
adjustment to be considered as the grant of a new Option.
Notwithstanding anything herein to the contrary, the Company may, in its
sole discretion, accelerate the timing of the exercise provisions of any
Option in the event of a tender offer for the Company's Shares, the
adoption of a plan of merger or consolidation under which all the Shares of
the Company would be eliminated, or a sale of all or substantially all of
the Company's assets. Alternatively, the Company may, in its sole
discretion, cancel any or all Options upon any of the foregoing events and
provide for the payment to Participants in cash of an amount equal to the
difference between the Option price and the price of a Share, as determined
in good faith by the Committee, at the close of business on the date of
such event, multiplied by the number of Shares subject to the Option so
canceled.
Upon a business combination by the Company or any of its Affiliates with
any corporation or other entity through the adoption of a plan of merger or
consolidation or a
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share exchange or through the purchase of all or substantially all of
the capital stock or assets of such other corporation or entity, the
Board or the Committee may, in its sole discretion, grant Options
pursuant hereto to all or any persons who, on the effective date of such
transaction, hold outstanding options to purchase securities of such
other corporation or entity and who, on and after the effective date of
such transaction, will become employees or directors of, or consultants
to, the Company or its Affiliates. The number of Shares subject to such
substitute Options shall be determined in accordance with the terms of
the transaction by which the business combination is effected.
Notwithstanding the other provisions of this Plan, the other terms of
such substitute Options shall be substantially the same as or
economically equivalent to the terms of the options for which such
Options are substituted, all as determined by the Board or by the
Committee, as the case may be. Upon the grant of substitute Options
pursuant hereto, the options to purchase securities of such other
corporation or entity for which such Options are substituted shall be
canceled immediately.
VIII. DISSOLUTION OR LIQUIDATION OF THE COMPANY
Upon the dissolution or liquidation of the Company other than in
connection with a transaction to which the preceding Article VII is
applicable, all Options granted hereunder shall terminate and become
null and void; provided, however, that if the rights of a Participant
under the applicable Options have not otherwise terminated and expired,
the Participant shall have the right immediately prior to such
dissolution or liquidation to exercise any Option granted hereunder to
the extent that the right to purchase shares thereunder has become
exercisable as of the date immediately prior to such dissolution or
liquidation.
IX. TERMINATION OF THE PLAN
The Plan shall terminate ten (10) years from the earlier of the date of
its adoption or the date of its approval by the stockholders. The Plan
may be terminated at an earlier date by vote of the stockholders or the
Board; provided, however, that any such earlier termination shall not
affect any Options granted or Option Agreements executed prior to the
effective date of such termination. Except as may otherwise be provided
for under Articles VII and VIII, and notwithstanding the termination of
the Plan, any Options granted prior to the effective date of the Plan's
termination shall remain exercisable in accordance with their terms, and
the provisions of the Plan with respect to the full and final authority
of the Committee under the Plan shall continue to control.
X. AMENDMENT OF THE PLAN
The Plan may be amended by the Board and such amendment shall become
effective upon adoption by the Board; provided, however, that any
amendment shall be subject to the approval of the stockholders of the
Company at or before the next annual meeting of the stockholders of the
Company if such stockholder approval is required by the Code, any
federal or state law or regulation, the rules of any stock exchange or
automated quotation system on which the Shares may be listed or quoted,
or if the Board, in its
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discretion, determines to submit such changes to the Plan to the
Company's stockholders for approval.
XI. EMPLOYMENT RELATIONSHIP
Nothing herein contained shall be deemed to prevent the Company or an
Affiliate from terminating the employment of a Participant, or to
prevent a Participant from terminating the Participant's employment with
the Company or an Affiliate.
XII. INDEMNIFICATION OF COMMITTEE
In addition to such other rights of indemnification as they may have as
directors or as members of the Committee, the members of the Committee
shall be indemnified by the Company against all reasonable expenses,
including attorneys' fees, actually and reasonably incurred in
connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be
a party by reason of any action taken by them as members of the
Committee and against all amounts paid by them in settlement thereof
(provided such settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as
to which it shall be adjudged in such action, suit or proceeding that
the Committee member is liable for gross negligence or willful
misconduct in the performance of his or her duties. To receive such
indemnification, a Committee member must first offer in writing to the
Company the opportunity, at its own expense, to defend any such action,
suit or proceeding.
XIII. SAVINGS CLAUSE
This Plan is intended to comply in all respects with applicable law and
regulations, including, (i) with respect to those Participants who are
reporting persons for purposes of Section 16 of the Exchange Act, Rule
16b-3 promulgated thereunder by the Securities and Exchange Commission,
if applicable, and (ii) with respect to executive officers, Code Section
162(m). In case any one or more provisions of this Plan shall be held
invalid, illegal, or unenforceable in any respect under applicable law
and regulation (including Rule 16b-3 and Code Section 162(m)), the
validity, legality, and enforceability of the remaining provisions shall
not in any way be affected or impaired thereby and the invalid, illegal,
or unenforceable provision shall be deemed null and void; however, to
the extent permitted by law, any provision that could be deemed null and
void shall first be construed, interpreted, or revised retroactively to
permit the Plan to be construed in compliance with all applicable law
(including Rule 16b-3 and Code Section 162(m)) so as to foster the
intent of this Plan. Notwithstanding anything herein to the contrary,
with respect to Participants who are reporting persons for purposes of
Section 16 of the Exchange Act, no grant of an Option to purchase Shares
shall permit unrestricted ownership of Shares by the Participant for at
least six (6) months from the date of the grant of such Option, unless
the Board determines that the grant of such Option to purchase Shares
otherwise qualifies as an exempt transaction under the then current Rule
16b-3 requirements.
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XIV. WITHHOLDING
Except as otherwise provided by the Committee,
A. The Company shall have the power and right to deduct or withhold,
or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes required by
law to be withheld with respect to any grant, exercise, or payment
made under or as a result of this Plan; and
B. In the case of any taxable event hereunder, a Participant may
elect, subject to the approval in advance by the Committee, to
satisfy the withholding requirement, if any, in whole or in part,
by having the Company withhold Shares of Common Stock that would
otherwise be transferred to the Participant having a Fair Market
Value, on the date the tax is to be determined, equal to the
minimum marginal tax that could be imposed on the transaction. All
elections shall be made in writing and signed by the Participant.
XV. EFFECTIVE DATE
This Plan, as amended and restated, shall become effective on April 1,
2002 upon adoption by the Board, provided that within one (1) year
before or after such adoption by the Board the amendment and restatement
of the Plan is approved by the stockholders of the Company.
XVI. GOVERNING LAW
This Plan shall be governed by the laws of the State of Delaware and
construed in accordance therewith.
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