Exhibit 10.1
SUPERCONDUCTOR TECHNOLOGIES INC.
1992 STOCK OPTION PLAN
(Amended and Restated through July 1997)
1. Purposes of the Plan. The purposes of this Stock Option Plan are:

  •   to attract and retain the best available personnel for positions of
substantial responsibility,     •   to provide additional incentive to Employees
and Consultants, and     •   to promote the success of the Company’s business.

Options granted under the Plan may be Incentive Stock Options or Nonstatutory
Stock Options, as determined by the Administrator at the time of grant.
2. Definitions. As used herein, the following definitions shall apply:

  (a)   “Administrator” means the Board or any of its Committee as shall be
administering the Plan, in accordance with Section 4 of the Plan.     (b)  
“Applicable Laws” means the legal requirements relating to the administration of
stock option plans under state corporate and securities laws and the Code.    
(c)   “Board” means the Board of Directors of the Company.     (d)   “Code”
means the Internal Revenue Code of 1986, as amended.     (e)   “Committee” means
a Committee appointed by the Board in accordance with Section 4 of the Plan.    
(f)   “Common Stock” means the Common Stock of the Company.     (g)   “Company”
means Superconductor Technologies Inc., a Delaware Corporation.     (h)  
“Consultant” means any person, including an advisor, engaged by the Company or a
Parent or Subsidiary to render services and who is compensated for such
services.

  (i)   “Continuous Status as an Employee or Consultant” means that the
employment or consulting relationship is not interrupted or terminated by the

 

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      Company, any Parent or Subsidiary. Continuous Status as an Employee or
Consultant shall not be considered interrupted in the case of: (i) any leave of
absence approved by the Board, including sick leave, military leave, or any
other personal leave; provided, however, that for purposes of Incentive Stock
Options, any such leave may not exceed ninety (90) days, unless reemployment
upon the expiration of such leave is guaranteed by contract (including certain
Company policies) or statute; or (ii) transfer between locations of the Company
or between the Company, its Parent, its Subsidiaries or its successor.

  (j)   “Director” means a member of the Board.     (k)   “Disability” means
total and permanent disability as defined in Section 22(e)(3) of the Code.    
(l)   “Employee” means any person, including Officers and Directors, employed by
the Company or any Parent or Subsidiary of the Company. Neither service as a
Director nor payment of a director’s fee by the Company shall be sufficient to
constitute “employment” by the Company.     (m)   “Exchange Act” means the
Securities Exchange Act of 1934, as amended.     (n)   “Fair Market Value”
means, as of any date, the value of Common Stock determined as follows:

  i.   If the Common Stock is listed on any established stock exchange or a
national market system, including without limitation the National Market System
of the National Association of Securities Dealers, Inc. Automated Quotation
(“NASDAQ”) System, the Fair Market Value of a Share of Common Stock shall be the
closing sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in Common Stock) on the last market trading day prior
to the day of determination, as reported in the Wall Street Journal or such
other source as the Administrator deems reliable;     ii.   If the Common Stock
is quoted on the NASDAQ Systems (but not on the National Market System thereof)
or is regularly quoted by a recognized securities dealer but selling prices are
not reported, the Fair Market Value of a Share of Common Stock shall be the mean
between the high bid and low asked prices for the Common Stock on the last
market trading day prior to the day of determination, as reported in the Wall
Street

 

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      Journal or such other source as the Administrator deems reliable;     iii.
  In the absence of an established market for Common Stock, the Fair Market
Value shall be determined in good faith by the Administrator.

  (o)   “Incentive Stock Option” means an Option intended to qualify as an
incentive stock option within the meaning of Section 422 of the Code and the
regulations promulgated thereunder.     (p)   “Nonstatutory Stock Option” means
an Option not intented to qualify as an Incentive Stock Option.     (q)  
“Notice of Grant” means a written notice evidencing certain terms and conditions
of an individual Option. The Notice of Grant is part of the Option Agreement.  
  (r)   “Officer” means a person who is an officer of the Company within the
meaning of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder.     (s)   “Option” means a stock option granted pursuant
to the Plan.     (t)   “Option Agreement” means a written agreement between the
Company and an Optionee evidencing the terms and conditions of an individual
Option grant. The Option Agreement is subject to the terms and conditions of the
Plan.     (u)   “Option Exchange Program” means a program whereby outstanding
options are surrendered in exchange for options with a lower exercise price.    
(v)   “Optioned Stock” means the Common Stock subject to an Option.     (w)  
“Optionee” means an Employee or Consultant who holds an outstanding Option.    
(x)   “Parent” means a “parent corporation,” whether now or hereafter existing,
as defined in Section 424(e) of the Code.     (y)   “Plan” means this Amended
and Restated 1988 Stock Option Plan.     (z)   “Rule 16b-3” means Rule 16b-3 of
the Exchange Act or any successor to Rule 16b-3, as in effect when discretion is
being exercised with respect to the Plan.

 

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  (aa)   “Share” means a share of the Common Stock, as adjusted in accordance
with Section 12 of the Plan.     (bb)   “Subsidiary” means a “subsidiary
corporation,” whether now or hereafter existing, as defined in Section 424(f) of
the Code.

3. Stock Subject to the Plan. Subject to the provisions of Section 12 of the
Plan, the maximum aggregate number of Shares which may be optioned and sold
under the Plan is 240,293 Shares (after giving effect to the 1-for-2 reverse
stock split to be effected in January 1993). The Shares may be authorized, but
unissued or reacquired Common Stock. However, should the Company reacquire
Shares which were issued pursuant to the exercise of an Option, such Shares
shall not become available for future grant under the Plan.
     If an Option expires or becomes unexercisable without having been exercised
in full, or is surrendered pursuant to an Option Exchange Program, the
unpurchased Shares which were subject thereto shall become available for future
grant or sale under the Plan (unless the Plan has terminated).
4. Administration of the Plan.
     (a) Procedure.
          (i) Multiple Administrative Bodies. The Plan may be administered by
different Committees with respect to different groups of Service Providers.
          (ii) Section 162(m). To the extent that the Administrator determines
it to be desirable to qualify Options granted hereunder as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the Plan shall
be administered by a Committee of two or more “outside directors” within the
meaning of Section 162(m) of the Code.
          (iii) Rule 16b-3. To the extent desirable to qualify transactions
hereunder as exempt under Rule 16b-3, the transactions contemplated hereunder
shall be structured to satisfy the requirements for exemption under Rule 16b-3.
          (iv) Other Administration. Other than as provided above, the Plan
shall be administered by (A) the Board or (B) a Committee, which committee shall
be constituted to satisfy Applicable Laws.
     (b) Powers of the Administrator. Subject to the provisions of the Plan, and
in the case of a Committee, subject to the specific duties delegated by the
Board to such Committee, the Administrator shall have the authority, in its
discretion:
          (i) to determine the Fair Market Value of the Common Stock, in
accordance with Section 2(n) of the Plan;

 

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          (ii) to select the Consultants and Employees to whom Options may be
granted hereunder;
          (iii) to determine whether and to what extent Options are granted
hereunder;
          (iv) to determine the number of shares of Common Stock to be covered
by each Option granted hereunder;
          (v) to approve forms of agreement for use under the Plan;
          (vi) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any award granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options may be exercised (which may be based on performance criteria) and any
restriction or limitation regarding any Option or the shares of Common Stock
relating thereto, based in each case on such factors as the Administrator, in
its sole discretion, shall determine;
          (vii) to reduce the exercise price of any Option to the then current
Fair Market Value if the Fair Market Value of the Common Stock covered by such
Option shall have declined since the date the Option was granted;
          (viii) to construe and interpret the terms of the Plan;
          (iv) to prescribe, amend and rescind rules and regulations relating to
the Plan;
          (x) to modify or amend each Option (subject to Section 14(c) of the
Plan);
          (xi) to allow Optionees to satisfy withholding tax obligations by
electing to have the Company withhold from the Shares to be issued upon exercise
of an Option that number of Shares having a Fair Market Value equal to the
amount required to be withheld. The Fair Market Value of the Shares to be
withheld shall be determined on the date that the amount of tax to be withheld
is to be determined. All elections by an Optionee to have Shares withheld for
this purpose shall be made in such form and under such conditions as the
Administrator may deem necessary or advisable;
          (xii) to authorize any person to execute on behalf of the Company any
instrument required to effect the grant of an Option previously granted by the
Administrator;
          (xiii) to institute an Option Exchange Program;
          (xiv) to determine the terms and restrictions applicable to Options;

 

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          (xv) to make all other determinations deemed necessary or advisable
for administering the Plan; and
          (xvi) the Administrator shall have the authority, in its discretion,
to determine any vesting acceleration or waiver of forfeiture restrictions
regarding any Option or the shares of Common Stock relating thereto, based in
each case on such factors as the Administrator, in its sole discretion, shall
determine.
     (c) Effect of Administrators Decision. The Administrator’s decisions,
determinations and interpretations shall be final and binding on all Optionees
and any other holders of Options.
5. Eligibility. Nonstatutory Stock Options may be granted to Employees and
Consultants. Incentive Stock Options may be granted only to Employees. If
otherwise eligible, an Employee or Consultant who has been granted an Option may
be granted additional Options.
6. Limitations.
     (a) Each Option shall be designated in the Notice of Grant as either an
Incentive Stock Option or a Nonstatutory Stock Option. However, notwithstanding
such designations, to the extent that the aggregate Fair Market Value: (i) of
Shares subject to an Optionee’s incentive stock options granted by the Company,
any Parent or Subsidiary, which (ii) become exercisable for the first time
during any calendar year (under all plans of the Company or any Parent of
Subsidiary) exceeds $100,000, such excess Options shall be treated as
Nonstatutory Stock Options. For purposes of this Section 6(a), incentive stock
options shall be taken into account in the order in which they were granted, and
the Faire Market Value of the Shares shall be determined as of the time of
grant.
     (b) Neither the Plan nor any Option shall confer upon an Optionee any right
with respect to continuing the Optionee’s employment or consultant relationship
with the Company, nor shall they interfere in any way with the Optionee’s right
or the Company’s right to terminate such employment or consulting relationship
at any time, with or without cause.
     (c) The following limitations shall apply to grants of Options to
Employees:
          (i) No Employee shall be granted, in any fiscal year of the Company,
Options to purchase more than 200,000 Shares.
          (ii) The foregoing limitations shall be adjusted proportionately in
connection with any change in the Company’s capitalization as described in
Section 13.
          (iii) If an Option is cancelled in the same fiscal year of the Company
in which it was granted (other than in connection with a transaction described
in Section

 

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13), the cancelled Option will be counted against the limits set forth in
subsection (i) above. For this purpose, if the exercise price of an Option is
reduced, the transaction will be treated as a cancellation of the Option and the
grant of a new Option.
7. Term of Plan. Subject to Section 19 of the Plan, the Plan shall become
effective upon the earlier to occur of its adoption by the Board or its approval
by the stockholders of the Company as described in Section 18 of the Plan. It
shall continue in effect for a term of ten (10) years unless terminated earlier
under Section 14 of the Plan.
8. Term of Option. The term of each Option shall be stated in the Notice of
Grant. Such term shall be ten (10) years from the date of grant or such shorter
term as may be provided in the Notice of Grant. Moreover, in the case of an
Incentive Stock Option granted to an Optionee who, at the time the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent of
Subsidiary (a “10% Owner”), the term of the Incentive Stock Option shall be five
(5) years from the date of grant or such shorter term as may be provided in the
Notice of Grant.
9. Option Exercise Price and Consideration.
     (a) Exercise Price. The per share exercise price for the Share to be issued
pursuant to exercise of an Option shall be determined by the Administrator,
subject to the following:
          (i) In the case of an Incentive Stock Option
               (A) granted to an Employee who, at the time of the Incentive
Stock Option is granted, owns stock representing more than ten percent (10%) of
the voting power of all classes of stock of the Company or any Parent or
Subsidiary, the per Share exercise price shall be no less than 110% of the Fair
Market Value per Share on the date of grant.
               (B) granted to any other Employee, the per Share exercise price
shall be no less than 100% of the Fair Market Value per Share on the date of
grant.
          (ii) In the case of a Nonstatutory Stock Option, the per Share
exercise price shall be determined by the Administrator but in no event shall be
less than 50% of the Fair Market Value per Share on the date of grant. In the
case of a Nonstatutory Stock Option intended to qualify as “performance-based
compensation” within the meaning of Section 162(m) of the Code, the per Share
exercise price shall be no less than 100% of the Fair Market Value per Share on
the date of grant.
          (iii) Notwithstanding the foregoing, Options may be granted with a per
Share exercise price of less than 100% of the Fair Market Value per Share on the
date of grant pursuant to a merger or other corporation transaction.

 

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     (b) Waiting Period and Exercise Dates. At the time an Option is granted,
the Administrator shall fix the period within which the Option may be exercised
and shall determine any conditions which must be satisfied before the Option may
be exercised. In so doing, the Administrator may specify that an Option may not
be exercised until the completion of a service period.
     (c) Form of Consideration. The Administrator shall determine the acceptable
form of consideration for exercising an Option, including the method of payment.
In the case of an Incentive Stock Option, the Administrator shall determine the
acceptable form of consideration at the time of grant. Such consideration may
consist entirely of:
          (i) cash;
          (ii) check;
          (ii) promissory note;
          (iv) other Shares which (A) in the case of Shares acquired upon
exercise of an option, have been owned by the Optionee for more than six months
on the date of surrender, and (B) have a Fair Market Value on the date of
surrender equal to the aggregate exercise price of the Shares as to which said
Option shall be exercised;
          (v) delivery of a properly executed exercise notice together with such
other documentation as the Administrator and the broker, if applicable, shall
require to effect an exercise of the Option and delivery to the Company of the
sale or loan proceeds required to pay the exercise price;
          (vi) any combination of the foregoing methods of payment; or
          (vii) such other consideration and method of payment for the issuance
of Shares to the extent permitted by Applicable Laws.
10. Exercise of Option.
     (a) Procedure for Exercise; Rights as a Stockholder. Any Option granted
hereunder shall be exercisable according to the terms of the Plan and at such
times and under such conditions as determined by the Administrator and set forth
in the Option Agreement. An Option may be exercised for a fraction of a Share.
     An Option shall be deemed exercised when the Company receives: (i) written
notice of exercise (in accordance with the Option Agreement) from the person
entitled to exercise the Option, and (ii) full payment for the Shares with
respect to which the Option is exercised. Full payment may consider of any
consideration and method of payment authorized by the Administrator and
permitted by the Option Agreement and the Plan. Shares issued upon exercise of
an Option shall be issued in the name of the Optionee or, if requested by the
Optionee, in the name of the Optionee and his or her spouse. Until the

 

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stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a stockholder shall exist with respect to the Optioned Stock, notwithstanding
the exercise of the Option. The Company shall issue (or cause to be issued) such
stock certificate promptly after the Option is exercised. No adjustment will be
made for a dividend or other right for which the record date is prior to the
date the stock certificate is issued, except as provided in Section 12 of the
Plan.
     Exercising an Option in any manner shall decrease the number of Shares
thereafter available, both for purposes of the Plan and for sale under the
Option, by the number of Share as to which the Option is exercised.
     (b) Termination of Employment or Consulting Relationship. In the event that
an Optionee’s Continuous Status as an Employee or Consultant terminates (other
than upon the Optionee’s death or Disability), the Optionee may exercise his or
her Option, but only within such period of time as is determined by the
Administrator, and only to the extent that the Optionee was entitled to exercise
it at the date of termination (but in no event later than the expiration of the
term of such Option as set forth in the Notice of Grant). In the case of an
Incentive Stock Option, the Administrator shall determine such period of time
(in no event to exceed ninety (90) days from the date of termination) when the
Option is granted. If, at the date of termination, the Optionee is not entitled
to exercise his or her entire Option, the Shares covered by the unexercisable
portion of the Option shall revert to the Plan. If, after termination, the
Optionee does not exercise his or her Option within the time specified by the
Administrator, the Option shall terminate, and the Shares covered by such Option
shall revert to the Plan.
     (c) Disability of Optionee. In the even that an Optionee’s Continuous
Status as an Employee or Consultant terminates as a result of the Optionee’s
Disability, the Optionee may exercise his or her Option at any time within
twelve (12) months from the date of such termination, but only to the extent
that the Optionee was entitled to exercise it at the date of such termination
(but in no event later than the expiration of the term of such Option as set
forth in the Notice of Grant). If, at the date of termination, the Optionee is
not entitled to exercise his or her entire Option, the Shares covered by the
unexercisable portion of the Option shall revert to the Plan. If, after
termination, the Optionee does not exercise his or her Option within the time
specified herein, the Option shall terminate, and the Shares covered by such
Option shall revert to the Plan.
     (d) Death of Optionee. In the event of the death of an Optionee, the Option
may be exercised at any time within twelve (12) months following the date of
death (but in no event later than the expiration of the term of such Option as
set forth in the Notice of Grant), by the Optionee’s estate or by the person who
acquired the right to exercise the Optoin by bequest or inheritance, but only to
the extent that the Optionee was entitled to exercise the Option at the date of
death. If, at the time of death, the Optionee was not entitled to exercise his
or her entire Option, the Shares covered by the unexercisable portion fo the
Option shall immediately revert to the Plan. If, after death, the Optionee’s

 

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estate or a person who acquired the right to exercise the Option by bequest or
inheritance does not exercise the Option within the time specified herein, the
Option shall terminate, and the Shares covered by such Option shall revert to
the Plan.
11. Non-Transferability of Options. Unless determined otherwise by the
Administrator, an Option may not be sold, pledged, assigned, hypothecated,
transferred, or disposed of in any manner other than by will or by the laws of
descent or distribution and may be exercised, during the lifetime of the
Optionee, only by the Optionee. If the Administrator makes an Option
transferable, such Option shall contain such additional terms and conditions as
the Administrator deems appropriate.
12. Adjustments Upon Changes in Capitalization, Dissolution, Merger, Asset Sale
or Change of Control.
     (a) Changes in Capitalization. Subject to any required action by the
stockholders of the Company, the number of shares of Common Stock covered by
each outstanding Option, and the number of shares of Common Stock which have
been authorized for issuance under the Plan but as to which no Options have yet
been granted or which have been returned to the Plan upon cancellation or
expiration of an Option, as well as the price per share of Common Stock covered
by each such outstanding Option, shall be proportionately adjusted for any
increase or decrease in the number of issued shares of Common Stock resulting
from a stock split, reverse stock split, stock dividend, combination or
reclassification of the Common Stock, or any other increase or decrease in the
number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been “effected
without receipt of consideration.” Such adjustment shall be made by the Board,
whose determination in that respect shall be final, binding and conclusive.
Except as expressly provided herein, no issuance by the Company of shares of
stock of any class, or securities convertible into shares of stock of any class,
shall affect, and no adjustment by reason thereof shall be made with respect to,
the number of price of shares of Common Stock subject to an Option.
     (b) Dissolution or Liquidation. In the even of the proposed dissolution or
liquidation of the Company, to the extend that an Option has not been previously
exercised, it will terminate immediately prior to the consummation of such
proposed action. However, in such event, the Board may, alternatively and in the
exercise of its sole discretion, declare that any Option shall terminate as of a
date fixed by the Board and give each Optionee the right to exercise his or her
Option as to all or any part of the Optioned Stock, including Shares as to which
the Option would not otherwise be exercisable.
     (c) Merger or Asset Sale. In the event of a merger of the Company with or
into another corporation, or the sale of substantially all of the assets of the
Company, each outstanding Option shall be assumed or an equivalent option or
right to receive an equivalent amount of Common Stock shall be substituted by
the successor corporation or

 

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a Parent or Subsidiary of the successor corporation. Moreover, subject to
subsection (d) below, in the further event that the successor corporation does
not agree to assume the Option or to substitute an equivalent option or right,
the Optionee shall vest in and have the right to exercise the Option as to all
of the Optioned Stocked, including Shares as to which it would not otherwise be
vested or exercisable. If the Option becomes vested and exercisable in lieu of
assumption or substitution in the event of a merger or sale of assets, the
Administrator shall notify the Optionee that the Option shall be fully vested
and exercisable for a period of fifteen (15) days from the date of such notice,
and the Option will terminate upon the expiration of such period. For the
purposes of this paragraph, the Option shall be considered assumed if, following
the merger or sale of assets, the option or right confers the right to purchase,
for each Share of Optioned Stock subject to the Option immediately prior to the
merger or sale of assets, the consideration (whether stock, cash, or other
securities or property) received in the merger or sale of assets by holders of
Common Stock for each Share held on the effective date of the transaction (and
if holders were offered a choice of consideration, the type of consideration
chosen by the holders of a majority of the outstanding Shares); provided,
however, that if such consideration received in the merger or sale of assets was
not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation and the
participant, provide for the consideration to be received upon the exercise of
the Option, for each Share of Optioned Stock subject to the Option, to be solely
common stock of the successor corporation or its Parent equal in fair market
value to the per share consideration received by holders of Common Stock in the
merger or sale of assets.
     (d) Change in Control. In the event of a Change of Control (as defined
below), except as otherwise determined by the Board, the Optionee shall fully
vest in and have the right to exercise the Option as to all of the Optioned
Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option becomes fully vested and exercisable as the result of
a Change of Control, the Administrator shall notify the Optionee in writing or
electronically prior to the Change of Control that the Option shall be fully
vested and exercisable for a period of fifteen (15) days from the date of such
notice, and the Option shall terminate upon the expiration of such period. For
purposes of this Agreement, a “Change of Control” means the happening of any of
the following events:
          (i) When any “person,” as such term is used in Sections 13(d) and
14(d) of the Exchange Act (other than the Company, a Subsidiary or a Company
employee benefit plan, including any trustee of such plan acting as trustee) is
or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company’s ten
outstanding securities entitled to vote generally in the election of directors:
or
          (ii) The stockholders of the Company approve a merger or consolidation
of the Company with any other corporation, other than a merger or consolidation
which would result in the voting securities of the Company outstanding
immediately prior

 

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thereto continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than fifty
percent (50%) of the total voting power represented by the voting securities of
the Company or such surviving entity outstanding immediately after such merger
or consolidation, or the stockholders of the Company approve an agreement for
the sale or disposition by the Company of all or substantially all the Company’s
assets; or
          (iii) A change in the composition of the Board of Directors of the
Company, as a result of which fewer than a majority of the directors are
Incumbent Directors. “Incumbent Directors” shall mean directors who are either
(A) are directors of the Company as of the date the Plan is approved by the
stockholders, or (B) are elected, or nominated for election, to the Board of
Directors of the Company with the affirmative votes of at least a majority of
the Incumbent Directors at the time of such election or nomination (but shall
not include an individual whose election or nomination is in connection with an
actual or threatened proxy contest relating to the election of directors to the
Company).
13. Date of Grant. The date of grant of an Option shall be, for all purposes,
the date on which the Administrator makes the determination granting such
Option, or such other later date as is determined by the Administrator. Notice
of the determination shall be provided to each Optionee within a reasonable time
after the date of such grant.
14. Amendment and Termination of the Plan.
     (a) Amendment and Termination. The Board may at any time amend, alter,
suspend or terminate the Plan.
     (b) Stockholder Approval. The Company shall obtain stockholder approval of
any Plan amendment to the extent necessary and desirable to comply with
Rule 16b-3 or with Section 422 of the Code (or any successor rule or statue or
other applicable law, rule or regulation, including the requirements of any
exchange or quotation system on which the Common Stock is listed or quoted).
Such stockholder approval, if required, shall be obtained in such a manner and
to such a degree as is required by the applicable law, rule or regulation.
     (c) Effect of Amendment or Termination. No amendment, alteration,
suspension or termination of the Plan shall impair the rights of any Optionee,
unless mutually agreed otherwise between the Optionee and the Administrator,
which agreement must be in writing and signed by the Optionee and the Company.
15. Conditions Upon Issuance of Shares.
     (a) Legal Compliance. Shares shall not be issued pursuant to the exercise
of any Option unless the exercise of such Option and the issuance and delivery
of such Shares shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations

 

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promulgated thereunder, Applicable Laws, and the requirements of any stock
exchange or quotation system upon which the Shares may than be listed or quoted,
an shall be further subject to the approval of counsel for the Company with
respect to such compliance.
     (b) Investment Representations. As a condition to the exercise of an
Option, the Company may require the person exercising such Option to represent
and warrant at the time of any such exercise that the Shares are being purchase
only for investment and without any present intention to sell or distribute such
Shares if, in the opinion of counsel for the Company, such a representation is
required.
16. Liability of Company.
     (a) Inability to Obtain Authority. The inability of the Company to obtain
authority from any regulatory body having jurisdiction, which authority is
deemed by the Company’s counsel to be necessary to the lawful issuance and sale
of any Shares hereunder, shall relieve the Company of any liability in respect
of the failure to issue or sell such Shares as to which such requisite authority
shall not have been obtained.
     (b) Grants Exceeding Allotted Shares. If the Optioned Stock covered by an
Option exceeds, as of the date of the grant, the number of Shares which may be
issued under the Plan without additional stockholder approval of an amendment
sufficiently increasing the number of Shares subject to the Plan is timely
obtained in accordance with Section 14(b) of the Plan.
17. Reservation of Shares. The Company, during the term of this Plan, will at
all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. Stockholder Approval. Continuance of the Plan shall be subject to approval
by the stockholders of the Company within twelve (12) months before or after the
date the Plan is adopted. Such stockholder approval shall be obtained in the
manner and to the degree required under applicable federal and state law.