Exhibit 99.1
CAPSULE COMMUNICATIONS, INC.
2001 STOCK OPTION PLAN
Section 1. Purposes.
The purposes of the Plan are to: (a) assist the Company in recruiting and
retaining highly qualified employees, directors and consultants; (b) provide
Employees with an incentive for productivity; and (c) provide Employees an
opportunity to share in the growth and value of the Company. The Options
granted pursuant to the Plan are intended to constitute either Incentive Stock
Options within the meaning of Section 422 of the Code, or non-qualified stock
options, as determined by the Board or the Committee at the time the Option is
granted.
Section 2. Definitions.
Capitalized terms used herein will have the meanings set forth in this
Section 2:
(a) "Board" shall mean the board of directors of the Company, as
constituted from time to time.
(b) "Cause" means: (i) conviction of a felony by a federal or
state court of competent jurisdiction; (ii) gross misconduct relating to the
Company; (iii) intentional misappropriation of funds; or (iv) deliberate and
premeditated acts against the interest of the Company.
(c) "Change in Control" means:
(i) The acquisition, after the effective date of the
Plan, in one or more transactions by any "Person"
(as the term person is used for purposes of Sections
13(d) or 14(d) of the Exchange Act, but excluding
from such definition any person who, as of the
effective date of the Plan is the beneficial owner
of Voting Securities) of "Beneficial ownership"
(within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of twenty-five (25%) or more of
the combined voting power of the Company's then
outstanding voting securities (the "Voting
Securities"), provided that for purposes of this
clause (i) Voting Securities acquired directly from
the Company by any Person shall be excluded from the
determination of such Person's Beneficial ownership
of Voting Securities (but such Voting Securities
shall be included in the calculation of the total
number of Voting Securities then outstanding); or
(ii) approval by stockholders of the Company of:
(A) a merger, reorganization or consolidation
involving the Company if the stockholders of
the Company immediately before such merger,
reorganization or consolidation do not or
will not own directly or indirectly
immediately following such merger,
reorganization or consolidation, more than
fifty percent (50%) of the combined voting
power of the outstanding voting securities of
the company resulting from or surviving such
merger, reorganization or consolidation in
substantially the same proportion as their
ownership of the Voting Securities
outstanding immediately before such merger,
reorganization or consolidation; or
(B) a complete liquidation or dissolution of the
Company;
(C) an agreement for the sale or other disposition
of all or substantially all of the assets of
the Company; or
(iii) acceptance by stockholders of the Company of shares in
a share exchange if the stockholders of the Company
immediately before such share exchange do not or will
not own directly or indirectly immediately following
such share exchange more than fifty percent (50%) of
the combined voting power of the outstanding voting
securities of the entity resulting from or surviving
such share exchange in substantially the same
proportion as their ownership of the Voting Securities
outstanding immediately before such share exchange.
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(e) "Committee" shall mean the Committee appointed by the Board
in accordance with Section 3(a) of the Plan, if one is appointed.
(f) "Common Stock" shall mean the common stock of the Company,
$.001 par value per share, or the common stock of any successor corporation.
(g) "Company" shall mean Capsule Communications, Inc., a Delaware
corporation, or any successor corporation, including a successor by merger.
(h) "Director" shall mean an individual who is a member of the
Board.
(i) "Disability" shall mean a condition rendering an Optionee
Disabled.
(j) "Disabled" shall have the same meaning as set forth in
Section 22(e)(3) of the Code.
(k) "Employee" shall mean any person employed by the Company or
any of its Subsidiaries. In addition, solely for the purpose of determining
eligibility for the grant of non-qualified stock options hereunder, and not
for the purpose of affecting the status of the relationship between such
person and the Company, the term "Employee" shall include consultants and
advisors to the Company or any of its Subsidiaries, as well as Directors and
members of the board of directors of any Subsidiary.
(l) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
(m) "Fair Market Value Per Share" shall mean the fair market
value of a share of Common Stock, as determined pursuant to Section 7 hereof.
(n) "Incentive Stock Option" shall mean an Option which is an
incentive stock option as described in Section 422 of the Code.
(o) "Non-Employee Director" shall have the meaning set forth in
Rule 16b- 3(b)(3)(i) promulgated by the Securities and Exchange Commission
under the Exchange Act, or any successor definition adopted by the Securities
and Exchange Commission; provided, however, that the Board or the Committee
may, to the extent that it deems necessary to comply with Section 162(m) of
the Code or regulations thereunder, require that each "Non-Employee Director"
also be an "outside director" as that term is defined in regulations under
Section 162(m).
(p) "Option(s)" shall mean an Incentive Stock Option or a non-
qualified stock option to purchase Shares that is granted pursuant to the
Plan.
(q) "Option Agreement" shall mean a written agreement
substantially in the form as the Board or Committee (subject to the terms and
conditions of the Plan) may from time to time approve evidencing and
reflecting the terms of an Option.
(r) "Optionee" shall mean an Employee to whom an Option is
granted.
(s) "Parent Corporation" shall mean a parent corporation, whether
now or hereafter existing, as defined in Section 424(e) of the Code.
(t) "Participant" shall mean each Employee to whom an Option is
granted pursuant to the Plan.
(u) "Person" shall mean an individual, partnership, corporation,
limited liability company, trust, joint venture, unincorporated association,
or other entity or association.
(v) "Plan" shall mean this Capsule Communications, Inc. 2001 Stock
Option Plan.
(w) "Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
(x) "Shares" shall mean shares of Common Stock subject to the
Plan, as described in Section 5 and adjusted in accordance with Section 8 of
the Plan.
(y) "Subsidiary" shall mean a subsidiary corporation, whether now
or hereafter existing, as defined in sections 424(f) and (g) of the Code.
Section 3. Administration.
(a) Procedure. The Plan will be administered by the Board. The
Board may at any time appoint a Committee consisting of not less than two Non-
Employee Directors to administer the Plan on behalf of the Board. If the Board
appoints a Committee pursuant to this Section 3(a), that Committee will
possess all of the power and authority of, and will be authorized to take any
and all actions required to be taken hereunder by, the Board, subject to such
terms and conditions as the Board may prescribe.
Members of any Committee established pursuant to this Section 3(a) will
serve for such period of time as the Board may determine. Members of the Board
or the Committee who are eligible for Options or have been granted Options may
vote on any matters affecting the administration of the Plan or the grant of
any Options pursuant to the Plan, except that no such member shall act upon
the grant of an Option to himself or herself, but any such member may be
counted in determining the existence of a quorum at any meeting of the Board
or Committee during which action is taken with respect to the grant of Options
to himself or herself.
From time to time the Board may increase the size of the Committee and appoint
additional members thereto, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies however caused, or remove
all members of the Committee and thereafter directly administer the Plan.
(b) Powers of the Board and the Committee. Subject to the express
provisions of the Plan, the Board or the Committee shall have the authority,
in its sole and absolute discretion:
(i) to grant Options;
(ii) to determine the Employees to whom and the times at
which Options are granted;
(iii) to determine the terms and provisions of each Option
under the Plan and each Option Agreement and to
modify or amend any outstanding Option or Option
Agreement;
(iv) to correct any defect, supply any omission and
reconcile any inconsistency in the Plan or any Option
Agreement in the manner and to the extent that it
deems desirable;
(v) to prescribe, amend, modify and rescind rules and
regulations relating to the proper administration of
the Plan;
(vi) to accelerate the vesting or exercise date of any
Option;
(vii) to interpret the Plan or any Option Agreement;
(viii) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the
grant of an Option or to take such other actions as
may be necessary or appropriate with respect to the
Company's rights pursuant to Options or agreements
relating to the grant or exercise thereof; and
(ix) to make such other determinations and establish such
other procedures as it deems necessary or advisable
for the proper administration of the Plan.
(c) Effect of the Board's or Committee's Decision. All decisions,
determinations and interpretations of the Board or the Committee pursuant to
the authority granted under this Section 3 will be final and binding upon all
parties.
(d) Limitation of Liability. No member of the Board or of the
Committee shall be liable for any good faith determination, act or failure to
act in connection with the Plan or any Option granted hereunder.
Section 4. Eligibility.
Options may be granted only to Employees. An Employee who has received an
Option, if he or she is otherwise eligible, may receive additional Options.
Section 5. Stock Subject to the Plan.
Subject to the provisions of this Section 5 and the provisions of Section
8 of the Plan, the maximum aggregate number of Shares which may be subject to
Options under the Plan is 500,000 Shares. If any Option issued hereunder
should expire or become unexercisable for any reason without having been
exercised in full, the unpurchased Shares which were subject to such option
shall, unless the Plan shall have been terminated, be returned to the Plan and
become available for future grants under the Plan.
Section 6. Terms and Conditions of Options.
Each Option granted pursuant to the Plan shall be authorized by the Board
or the Committee and shall be evidenced by an Option Agreement in such form as
the Board or the Committee may from time to time determine. Each Option
Agreement shall contain such provisions as the Board or the Committee may
require (including provisions which may specifically supersede the terms of
the Plan). Subject to the preceding sentence, each Option Agreement shall
incorporate by reference the terms and conditions of the Plan, including the
following terms and conditions:
(a) Number of Shares. The number of Shares subject to the Option
will be stated in the Option Agreement.
(b) Option Price. The price per Share payable on the exercise of
any Option which is an Incentive Stock Option will be stated in the Option
Agreement and shall be no less than the Fair Market Value Per Share of the
Common Stock on the date such Option is granted, without regard to any
restriction other than a restriction which will never lapse. Notwithstanding
the foregoing, if an Option which is an Incentive Stock Option shall be
granted under the Plan to any person who, at the time of the grant of such
Option, owns (including by attribution under Section 424(d) of the Code) stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, its Parent Corporation or any Subsidiary, the price per
Share payable upon exercise of such Incentive Stock Option shall be no less
than one hundred ten percent (110%) of the Fair Market Value Per Share of the
Common Stock on the date such Option is granted. The price per Share payable
on the exercise of an Option which is a non-qualified stock option shall be no
less than twenty-five percent (25%) of the Fair Market Value Per Share of the
Common Stock on the date such Option is granted, determined without regard to
any restriction other than a restriction which will never lapse, and shall be
stated in the Option Agreement.
(c) Consideration. The consideration to be paid for the Shares to
be issued upon the exercise of an Option, including the method of payment,
shall be determined by the Board or the Committee and, subject to subsections
(i) and (ii) below, may consist entirely of cash, check, promissory notes or
Shares of Common Stock having an aggregate Fair Market Value Per Share on the
date of surrender equal to the aggregate exercise price of the Shares as to
which said Option shall be exercised, or any combination of such methods of
payment, or such other consideration and method of payment permitted under any
laws to which the Company is subject and which is approved by the Board or the
Committee.
(i) If the consideration for the exercise of an Option is
a promissory note, such note will be full recourse
and bear interest at a per annum rate which is not
less than the applicable federal rate determined in
accordance with section 1274(d) of the Code as of the
date of exercise. In such an instance the Company
may, in its sole and absolute discretion, retain the
Shares purchased upon exercise of the Option in
escrow as security for payment of the promissory
note.
(ii) If the consideration for the exercise of an Option is
the surrender of previously acquired and owned shares
of Common Stock, the Optionee will be required to
make representations and warranties satisfactory to
the Company regarding his or her title to the shares
of Common Stock used to effect the purchase (the
"Payment Shares"), including without limitation,
representations and warranties that the Optionee has
good and marketable title to such Payment Shares free
and clear of any and all liens, encumbrances,
charges, equities, claims, security interests,
options or restrictions, and has full power to
deliver such Payment Shares without obtaining the
consent or approval of any person or governmental
authority other than those which have already given
consent or approval in a manner satisfactory to the
Company. If such Payment Shares were acquired by the
Optionee upon previous exercise of incentive stock
options granted within two years prior to the
exercise of the Option, or were acquired by the
Optionee upon previous exercise of incentive stock
options within one year prior to the exercise of the
Option, such Optionee shall be required, as a
condition to using the Payment Shares in payment of
the exercise price of the Option, to acknowledge the
tax consequences of doing so, in that such previously
exercised incentive stock options may have, by such
action, lost their status as incentive stock options,
and the Optionee may be required to recognize
ordinary income and be subject to tax withholding as
a result. The Board or the Committee may impose such
limitations and prohibitions on the use of previously
acquired and owned shares of Common Stock to exercise
an Option as it deems appropriate.
(d) Form of Option. The Option Agreement will state whether the
Option granted is an Incentive Stock Option or a non-qualified stock option.
(e) Exercise of Options. Any Option granted hereunder shall be
exercisable at such times and under such conditions as shall be set forth in
the Option Agreement (as determined by the Board or the Committee), which may
include performance criteria with respect to the Company and/or the Optionee,
and as shall be permissible under the terms of the Plan.
An Option may be exercised in accordance with the provisions of the Plan
as to all or any portion of the Shares then exercisable under an Option from
time to time during the term of the Option.
An Option shall be deemed to be exercised when written notice of such
exercise has been given to the Company at its principal executive office in
accordance with the terms of the Option Agreement by the person entitled to
exercise the Option and full payment for the Shares with respect to which the
Option is exercised has been received by the Company, accompanied by any
agreements required by the terms of the Plan and/or Option Agreement. Full
payment may consist of such consideration and method of payment allowable
under this Section 6 of the Plan. No adjustment shall be made for a dividend
or other right for which the record date is prior to the date the Option is
exercised, except as provided in Section 8 of the Plan.
As soon as practicable after any exercise of an Option in accordance with
the provisions of the Plan, the Company shall, without transfer or issue tax
to the Optionee, deliver to the Optionee at the principal executive office of
the Company, or such other place as shall be mutually agreed upon between the
Company and the Optionee, a certificate or certificates representing the
Shares for which the Option shall have been exercised.
(f) Term and Vesting of Options.
(i) The Option Agreement shall specify any vesting
conditions applicable to the Options evidenced
thereby (including performance or target-based
vesting, or time-based vesting); provided, however,
that to the extent that no vesting conditions are
stated in the Option Agreement, the Options
evidenced thereby shall be fully vested. Options may
be exercised in any order elected by the Optionee
whether or not the Optionee holds any other
unexercised Options under the Plan or any other plan
of the Company.
(ii) Notwithstanding any other provision of the Plan, no
Option shall be (A) granted under the Plan after ten
(10) years from the date on which the Plan is
approved by stockholders, or (B) exercisable more
than ten (10) years from the date the Option is
granted; provided, however, that if an Option that
is intended to be an Incentive Stock Option is
granted under the Plan to any person who, at the
time of the grant of such Option, owns (including by
attribution under Section 424(d) of the Code) stock
possessing more than 10% of the total combined
voting power for all classes of stock of the
Company, its Parent Corporation or any Subsidiary,
the foregoing clause (B) shall be deemed modified by
substituting "five (5) years" for the term "ten (10)
years" that appears therein.
(iii) No Option granted to any Optionee shall be treated
as an Incentive Stock Option, to the extent such
Option would cause the aggregate Fair Market Value
Per Share (determined as of the date of grant of
each such Option) of the Shares with respect to
which Incentive Stock Options are exercisable by
such Optionee for the first time during any calendar
year to exceed $100,000. For purposes of determining
whether an Incentive Stock Option would cause such
aggregate Fair Market Value Per Share to exceed the
$100,000 limitation, such Incentive Stock Options
shall be taken into account in the order granted.
For purposes of this subsection, the term Incentive
Stock Options includes all incentive stock options
(as described in Section 422 of the Code) issued
under all plans of the Company, its Parent
Corporation or any Subsidiary.
(g) Termination of Options.
(i) Unless sooner terminated as provided in the Plan,
each Option shall be exercisable for such period of
time as shall be determined by the Board or the
Committee and set forth in the Option Agreement, and
shall be void and unexercisable thereafter.
(ii) Except as otherwise provided herein or in the Option
Agreement, upon the termination of the Optionee's
employment with, or service as a director of or
consultant or advisor to, the Company or any
Subsidiary for any reason, Options exercisable on
the date of termination of employment or such other
service shall be exercisable by the Optionee (or in
the case of the Optionee's death subsequent to
termination of employment or such other service, by
the Optionee's executor(s) or administrator(s)) for
a period of three (3) months from the date of the
Optionee's termination of employment or such other
relationship.
(iii) Except as otherwise provided herein or by the terms
of any Option, if the Optionee dies or becomes
Disabled while employed by, or while serving as a
director of or consultant or advisor to, the Company
or any Subsidiary, Options held by such Optionee
which are exercisable on the date the Optionee dies
or becomes Disabled shall be exercisable for a
period of twelve (12) months commencing on the date
of the Optionee dies or becomes Disabled, by the
Optionee or his or her legal guardian or
representative or, in the case of death, by his or
her executor(s) or administrator(s).
(h) Forfeiture. Notwithstanding any other provision of the Plan,
if the Optionee's employment by or service to the Company or any Subsidiary is
terminated for Cause, as determined by the Board or the Committee in its sole
and absolute discretion, all unexercised Options shall terminate upon the date
of such determination, or, if earlier, the effective time of such termination
of employment or engagement for Cause. In addition, if the Optionee's
employment or engagement is terminated for Cause, the Optionee shall forfeit
all Shares for which the Company has not yet delivered share certificates to
the Optionee and the Company shall refund to the Optionee any amount paid to
it with respect to such Shares, in the same form as it was paid (or in cash,
at the Company's discretion). Notwithstanding any other provision of the Plan,
the Company may withhold delivery of share certificates pending the resolution
of any inquiry that could lead to a finding resulting in forfeiture.
Section 7. Determination of Fair Market Value Per Share of Common
Stock.
The Fair Market Value of a Share of Common Stock, as of any date, shall
be determined as follows:
(a) If the Shares of Common Stock are listed on a national or
regional securities exchange or traded through the Nasdaq Stock Market, then
the Fair Market Value of a share of Common Stock shall be the closing price on
the relevant date for a share of Common Stock on such exchange or on the
Nasdaq Stock Market, as reported in The Wall Street Journal or other source
that the Board or Committee deems reliable, or if there is no trading on that
date, on the next preceding date on which there were reported share prices.
(b) If the Shares of Common Stock are traded in the over-the-
counter market, then the Fair Market Value of a share of Common Stock shall be
the mean of the bid and asked prices on the relevant date for a share of
Common Stock as reported in The Wall Street Journal or other source that the
Board or Committee deems reliable (or, if not so reported, as otherwise
reported by the National Association of Securities Dealers Automated
Quotations System or the NASD OTC Bulletin Board), or if there is no trading
on such date, on the next preceding date on which there were reported share
prices.
(c) In the absence of an established market for the Common Stock,
the Fair Market Value of a share of Common Stock shall be determined by the
Board or the Committee, in its sole and absolute discretion.
Section 8. Adjustments.
(a) Subject to required action by the stockholders, if any, the
number of Shares as to which Options may be granted under the Plan and the
number of Shares subject to outstanding Options and the Option prices thereof
will be adjusted proportionately for any increase or decrease in the number of
outstanding shares of Common Stock resulting from stock splits, reverse stock
splits, stock dividends, reclassifications and recapitalizations.
(b) No fractional Shares shall be issuable on account of any
action referenced in Section 8(a), and the aggregate number of Shares then
subject to an Option, when adjusted in accordance with that section, will be
rounded down to the next whole number, unless the Board, in its sole and
absolute discretion, shall determine to issue scrip certificates with respect
to any fractional Shares, which scrip certificates, in such event, shall be in
a form and have such terms and conditions as the Board, in its sole and
absolute discretion, shall prescribe.
Section 9. Rights as a Stockholder.
An Optionee shall have no rights as a stockholder of the Company with
respect to any Shares subject to an Option until such Option has been
exercised and a certificate with respect to the Shares purchased upon such
exercise has been issued to him or her.
Section 10. Time of Awarding Options.
The date of grant of an Option shall, for all purposes, be the date that
the Board or the Committee specifies or, if none is specified, then the date
of the determination by the Board or the Committee that the Option is granted.
Notice of the determination shall be given to each Employee to whom an Option
is granted within a reasonable time after the date of such grant.
Section 11. Modification, Extension and Renewal of Option.
Subject to the terms and conditions of the Plan, the Board may modify,
extend or renew an Option, or accept the surrender of an Option (to the extent
not theretofore exercised). Notwithstanding the foregoing, (a) no modification
of an Option which adversely affects the Optionee shall be made without the
consent of the Optionee, and (b) no Incentive Stock Option may be modified,
extended or renewed if such action would cause it to cease to be an "Incentive
Stock Option" within the meaning of Section 422 of the Code, unless the
Optionee specifically acknowledges and consents to such action.
Section 12. Transferability.
Except as specifically approved by the Board or the Committee with
respect to a particular Option which is not intended to be an Incentive Stock
Option, no Option shall be assignable or transferable otherwise than by will
or by the laws of descent and distribution, and during the lifetime of the
Optionee, such Option shall be exercisable only by the Optionee, or, in the
event of his or her legal incapacity or Disability, by his or her legal
guardian or representative.
Section 13. Change in Control.
(a) Notwithstanding anything to the contrary set forth in the Plan
(other than Section 13(b), below), upon a Change in Control, the Board or the
Committee may, in its sole and absolute discretion and contingent upon the
occurrence of that Change in Control: (i) cause all unvested Options to vest,
(ii) cause any or all Options to be exchanged for options to purchase common
stock in the successor corporation, and/or (iii) cancel the Options and cause
the Company to distribute to each Optionee cash and/or other substitute
consideration with a value equal to the excess, if any, of the aggregate Fair
Market Value of the Shares subject to Options held by that Optionee over the
aggregate exercise price of such Options.
(b) Notwithstanding anything to the contrary set forth in the Plan,
if the Board determines that it is in the best interests of the Corporation to
engage in a transaction that will result in a Change in Control and which is
intended to be accounted for under the pooling-of-interests method of
accounting, then the Board or the Committee will not take any action under
Section 13(a) and, instead, upon the consummation of that transaction: (i) all
unvested Options will automatically vest, Options will automatically vest,
(ii) the type of shares subject to the Plan and each outstanding Option will
be revised such that the Plan and each outstanding Option apply to the same
class of common stock of the surviving corporation as the Common Stock has
been converted into in connection with such transactions, and (iii) the number
of shares subject to and the exercise price per share of each outstanding
Option will be adjusted in a manner consistent with Treas. Reg. (S) 1.425-
1(a)(4)(i).
Section 14. Amendment of the Plan.
Insofar as permitted by law, the Board may from time to time suspend,
terminate or discontinue the Plan or revise or amend it in any respect
whatsoever; provided, however, stockholder approval shall be required for any
amendment to the Plan that will increase the aggregate number of Shares for
which Options may be granted hereunder, or change the class of persons
eligible to receive Options.
Section 15. Application of Funds.
The proceeds received by the Company from the sale of Shares pursuant to
the exercise of Options shall be used for general corporate purposes or such
other purpose as may be determined by the Board.
Section 16. Approval of the Board.
The Plan is effective on March 29, 2001, the date it was approved by a
majority of the members of the Board. The Plan has not been approved by the
stockholders of the Company.
Section 17. Conditions Upon Issuance of Shares.
Shares shall not be issued pursuant to the exercise of an Option unless
the exercise of such Option and the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act, the Exchange Act, the rules and
regulations promulgated thereunder, and the requirements of any stock exchange
upon which the Shares may then be listed, and shall be further subject to the
approval of counsel for the Company with respect to such compliance.
Section 18. Regulatory Approvals.
The Company, during the term of the Plan, shall use commercially
reasonable efforts to seek to obtain from appropriate regulatory agencies any
requisite authorization in order to issue and sell such number of Shares as
shall be sufficient to satisfy the requirements of the Plan. The inability of
the Company to obtain from any such regulatory agency having jurisdiction the
requisite authorization(s) deemed by the Company's counsel to be necessary for
the lawful issuance and sale of any Shares hereunder, or the inability of the
Company to confirm to its satisfaction that any issuance and sale of any
Shares hereunder will meet applicable legal requirements, shall relieve the
Company of any liability in respect to the failure to issue or sell such
Shares as to which such requisite authority shall not have been obtained.
Section 19. Taxes, Fees, Expenses and Withholding of Taxes.
(a) The Company shall pay all original issue and transfer taxes (but
not income taxes, if any) with respect to the grant of Options and/or the
issuance and transfer of Shares pursuant to the exercise thereof, and all
other fees and expenses necessarily incurred by the Company in connection
therewith, and will use commercially reasonable efforts to comply with all
laws and regulations which, in the opinion of counsel for the Company, are
applicable thereto.
(b) The grant of Options hereunder and the issuance of Shares
pursuant to the exercise of Options is conditioned upon the Company's
reservation of the right, in accordance with any applicable law, to withhold
from any property, compensation or other amounts payable to the Optionee, any
taxes required to be withheld under federal, state or other applicable law as
a result of the grant or exercise of such Option or the sale of the Shares
issued upon exercise thereof. To the extent that compensation or other
amounts, if any, payable to the Optionee are insufficient to pay any taxes
required to be so withheld, the Company may, in its sole and absolute
discretion, require the Optionee (or such other person entitled herein to
exercise the Option), as a condition of the exercise of an Option, to pay in
cash to the Company an amount sufficient to satisfy such tax liability or
otherwise to make adequate provision for the Company's compliance with its
withholding obligations under federal, state and other applicable law.
Section 20. Notices.
Any notice to be given to the Company pursuant to the provisions of the
Plan shall be addressed to the Company in care of its Secretary (or such other
person as the Company may designate from time to time) at its principal
executive office, and any notice to be given to an Optionee shall be delivered
personally or addressed to him or her at the address given beneath his or her
signature on his or her Option Agreement, or at such other address as such
Optionee may hereafter designate in writing to the Company. Any such notice
shall be deemed duly given on the date and at the time delivered via personal,
courier or recognized overnight delivery service or, if sent via telecopier,
on the date and at the time telecopied with confirmation of delivery or, if
mailed, on the date five (5) days after the date of the mailing (which shall
be by regular, registered or certified mail). Delivery of a notice by telecopy
(with confirmation) shall be permitted and shall be considered delivery of a
notice notwithstanding that it is not an original that is received. It shall
be the obligation of each person holding Shares purchased upon exercise of an
Option to provide the Secretary of the Company, by letter mailed as provided
herein, with written notice of his or her direct mailing address.
Section 21. No Enlargement of Rights.
The establishment and maintenance of the Plan is purely voluntary on the
part of the Company, and nothing contained herein will be deemed to give any
Optionee the right to be retained in the employ or service of the Company or
any Subsidiary, or to interfere with the right of the Company or Subsidiary to
discharge or retire any Optionee at any time. No Optionee shall have any right
to or interest in Options authorized hereunder prior to the grant thereof to
such Optionee, and upon such grant, he or she shall have only such rights and
interests as are expressly provided herein, subject, however, to all
applicable provisions of the Company's certificate of incorporation, as the
same may be amended from time to time.
Section 22. Information to Optionees.
(a) The Company, upon request, shall provide without charge to each
Optionee copies of such annual and periodic reports as are provided by the
Company to its stockholders generally.
(b) A copy of the Plan shall be delivered to the Secretary of the
Company and shall be shown by him to any Optionee making reasonable inquiry
concerning it.
Section 23. Invalid Provisions.
In the event that any provision of the Plan is found to be invalid or
otherwise unenforceable under any applicable law, such invalidity or
unenforceability shall not be construed as rendering any other provisions
contained herein as invalid or unenforceable, and all such other provisions
shall be given full force and effect to the same extent as though the invalid
or unenforceable provision was not contained herein.
Section 24. Applicable Law.
Subject to Section 25, the Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without regard to the
application of the principles of conflicts of laws.
Section 25. Successor.
In the event that the Company merges with another entity and such other
entity survives the merger, the Plan shall automatically be deemed to be the
Plan of the surviving entity and shall be governed by the laws of the state of
incorporation of the surviving entity, provided that the rights of individuals
with respect to Options, if any, outstanding at the time of such merger shall
continue to be governed by the laws of the State of Delaware.
Section 26. No Incentive Stock Options.
Notwithstanding any language in this Plan to the contrary, no Incentive
Stock Options shall be granted under the Plan because the Plan has not been
approved by the Company's stockholders.