Attached files
Exhibit 10.8
2010 RESTATED EMPLOYEE STOCK PLAN
Restatement No. 1 Dated August 1, 2018
1.
Purpose. This 2010
Restated Employee Stock Plan (the “Plan”) restates and integrates the
provisions of the original 2010 Employee Stock Plan and all duly
adopted amendments thereto as of August 1, 2018. The Plan is
intended to provide incentives: (a) to the officers and other
employees of SharpSpring, Inc. (the “Company”), its parent (if any) and
any present or future subsidiaries of the Company (collectively,
“Related
Corporations”) by providing them with opportunities to
purchase stock in the Company pursuant to options granted hereunder
which qualify as “incentive stock options” under
Section 422(b) of the Internal Revenue Code of 1986 (the
“Code”) (“ISO” or “ISOs”); (b) to directors,
officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to purchase stock
in the Company pursuant to options granted hereunder which do not
qualify as ISOs (“Non-Qualified Option” or
“Non-Qualified
Options”); (c) to directors, officers, employees and
consultants of the Company and Related Corporations by providing
them with awards of stock in the Company (“Awards”); and (d) to directors,
officers, employees and consultants of the Company and Related
Corporations by providing them with opportunities to make direct
purchases of stock in the Company (“Purchases”). Both ISOs and
Non-Qualified Options are referred to hereafter individually as an
“Option” and
collectively as “Options”. Options, Awards, and
authorizations to make Purchases are referred to hereafter
collectively as “Stock
Rights.” As used herein, the terms “parent” and “subsidiary” mean “parent
corporation” and “subsidiary corporation”
respectively, as those terms are defined in Section 425 of the
Code.
2.
Administration of the
Plan.
A.
The Plan shall be
administered by either (i) the Board of Directors of the Company
(the “Board”);
or (ii) a Stock Plan Committee (the “Board Committee”), appointed by the
Board, pursuant to the requirements of paragraph 2.D. herein; or
(iii) a Management Stock Plan Committee (the “Management Committee”), appointed
by the Board, pursuant to the requirements of paragraph 2.E. For
General purposes, where the context so allows, each of the Board
Committee and the Management Committee shall be referred to
hereafter collectively as the “Committee”). Subject to paragraphs
2.D., and 2.E., as applicable, herein and the terms of the Plan,
the Committee, if so appointed, shall have the authority to (i)
determine the employees of the Company and Related Corporations
(from among the class of employees eligible under paragraph 3 to
receive ISOs) to whom ISOs may be granted, and to determine (from
among the class of individuals and entities eligible under
paragraph 3 to receive Non-Qualified Options and Awards and to make
Purchases) to whom Non-Qualified Options, Awards and authorizations
to make Purchases may be granted; (ii) determine the time or times
at which Options or Awards may be granted or Purchases made; (iii)
determine the option price of shares subject to each Option, which
price shall not be less than the minimum price specified in
paragraph 6, and the purchase price of shares subject to each
Purchases; (iv) determine whether each Option granted shall be an
ISO or a Non-Qualified Option; (v) determine (subject to paragraph
7) the time or times when each Option shall become exercisable and
the duration of the exercise period; (vi) determine whether
restrictions such as repurchase options are to be imposed on shares
subject to Options, Awards and Purchases and the nature of such
restrictions, if any, and (vii) interpret the Plan and prescribe
and rescind rules and regulations relating to it. All references in
this Plan to the Committee shall mean the Board if no Committee has
been appointed. If the Committee determines to issue a
Non-Qualified Option, it shall take whatever actions it deems
necessary, under Section 422A of the Code and the regulations
promulgated thereunder, to ensure that such Option is not treated
as an ISO. The interpretation and construction by the Committee of
any provisions of the Plan or of any Stock Right granted under it
shall be final unless otherwise determined by the Board. The
Committee may from time to time adopt such rules and regulations
for carrying out the Plan as it may deem best. No member of the
Board or the Committee shall be liable for any action or
determination made in good faith with respect to the Plan or any
Stock Right granted under it.
B.
The Board Committee
may select one of its members as its chairman, and shall hold
meetings at such time and places it may determine. Acts by a
majority of the Board Committee, or actions reduced to or approved
in writing by a majority of the members of the Committee, shall be
the valid acts of the Board Committee. From time to time the Board
may increase the size of the Board Committee and appoint additional
members thereof, remove members (with or without cause) and appoint
new members in substitution therefor, fill vacancies however
caused, or remove all members of the Board Committee and thereafter
directly administer the Plan.
C.
Stock Rights may be
granted to members of the Board in accordance with paragraph 2.D.
herein and the provisions of this Plan applicable to other eligible
persons. Members of the Board who are either (i) eligible for Stock
Rights pursuant to the Plan or (ii) have been granted Stock Rights
may vote on any matters affecting the administration of the Plan or
the grant of any Stock Rights pursuant to the Plan.
D.
Each transaction,
i.e. each grant of Stock
Rights to any eligible participant under the Plan who is an officer
or director of the Company, (i) shall be approved in advance to the
granting of such right, by either the full Board or the Board
Committee which shall be composed solely of two or more
Non-Employee Directors; (ii) shall be approved in advance to the
granting of such right, or ratified no later than the next annual
meeting of shareholders, by the affirmative votes of the holders of
a majority of the securities of the issuer present, or represented,
and entitled to vote at a meeting duly held in accordance with the
applicable laws of the state or other jurisdiction in which the
Company is incorporated; or the written consent of the holders of a
majority of the securities of the issuer entitled to vote; or (iii)
shall be held by the officer or director for a period of six months
following the date of such acquisition, provided that with respect
to Options, at least six months shall elapse from the date of the
acquisition/grant of the Options to the date of disposition of the
Options (other than upon exercise or conversion) or its underlying
equity security. A Non-Employee Director is a director who is not,
at the time of such grant an officer of the Company or any Related
Corporation, or otherwise employed by the Company or any Related
Corporation; does not receive compensation, either directly or
indirectly, from the Corporation or any Related Corporation, for
services rendered as a consultant or in any capacity other than a
director, except for an amount that does not exceed the dollar
amount for which disclosure is required pursuant to Item 404(a) of
Regulation S-K promulgated under the Securities Act of 1933, as
amended; does not possess an interest in any other transaction for
which disclosure would be required pursuant to Item 404(a) of
Regulation S-K; and is not engaged in a business relationship for
which disclosure would be required pursuant to Item 404(b) of
Regulation S-K.
E.
Each transaction,
i.e. each grant of Stock
Rights (other than Awards and Purchases) to any eligible
participant under the Plan who is not (i) a “Covered
Employee” as defined in
Section 162(m)(3) of the Code of 1986, as interpreted by IRS Notice
2007-49; (ii) an “officer” of the Company within
the meaning of Section 16 of the Securities Exchange Act of 1934
and the rules and regulations promulgated thereunder
(“Executive
Officer”); or (iii) a
director of the Company, shall be approved in advance to the
granting of such right, by either the full Board, the Board
Committee or the full Management Committee. The Management
Committee shall be composed solely of one or more Executive
Officers, subject to any limitations imposed by the Board, as
determined by resolution of the Board, which shall include the
number of Stock Rights (other than Awards and Purchases) the
Management Committee shall have the authority to grant hereunder.
No member of the Management Committee may designate himself or
herself as a recipient of any Stock Right. The Management Committee
has no authority to grant Awards or Purchases under the Plan. Each
member of the Management Committee shall serve as a member of the
Management Committee at the pleasure of the Board.
3.
Eligible Employees and Others.
ISOs may be granted to any employee of the Company or any Related
Corporation. Those officers and directors of the Company who are
not employees may not be granted ISOs under the Plan. Non-Qualified
Options, Awards and authorizations to make Purchases may be granted
to any director (whether or not an employee), officer, employee or
consultant of the Company or any Related Corporation. The Committee
may take into consideration a recipient's individual circumstances
in determining whether to grant an ISO, a Non-Qualified Option or
an authorization to make a Purchase. Granting of any Stock Rights
to any individual or entity shall neither entitle that individual
or entity to, nor disqualify him from, participation in any other
grant of Stock Rights.
4.
Stock. The stock subject to Options, Awards and Purchases
shall be authorized but unissued shares of Common Stock of the
Company, $.001 par value (the “Common Stock”), or shares of Common Stock reacquired by
the Company in any manner. The aggregate number of shares
that may be issued pursuant to the Plan is 2,600,000, subject to
adjustment as provided in paragraph 13. Any such shares may
be issued as ISOs, Non-Qualified Options or Awards, or to persons
or entities making Purchases, so long as the number of shares
issued does not exceed such number, as adjusted. If any Option
granted under the Plan shall expire or terminate for any reason
without having been exercised in full or shall cease for any reason
to be exercisable in whole or in part, or if the Company shall
reacquire any unvested shares issued pursuant to Awards or
Purchases, the unpurchased shares subject to such Options and any
unvested shares so reacquired by the Company shall again be
available for grants of Stock Rights under the
Plan.
5. Granting
of Stock Rights. Stock Rights
may be granted under the Plan at any time after June 16, 2010 and
prior to June 15, 2020. Any Stock Right issued pursuant to
subsection (iii) of paragraph 2.D. shall be held for the period of
time described in that subsection. The date of grant of a Stock
Right under the Plan will be the date specified by the Committee at
the time it grants the Stock Right; provided, however, that such
date shall not be prior to the date on which the Committee acts to
approve the grant. The Committee shall have the right, with the
consent of the optionee, to convert an ISO granted under the Plan
to a Non-Qualified Option pursuant to paragraph 16. Awards and the
price of Purchases shall be at fair market value as determined by
the Board of Directors Except as expressly provided below in
paragraph 13 with respect to changes in capitalization and stock
dividends, in the event the Company pays any dividend on its
outstanding Common Stock, no such dividend shall be paid on any
restricted Common Stock acquired on the exercise of a Stock Right
prior to the vesting of such Stock Right.
6.
Minimum Option Price; ISO
Limitations.
A.
The price per share
specified in the agreement relating to each Non-Qualified Option
granted under the Plan shall in no event be less than the lesser of
(i) the book value per share of Common Stock as of the end of the
fiscal year of the Company immediately preceding the date of such
grant, or (ii) 25 percent of the fair market value per share of
Common Stock on the date of such grant.
B.
The price per share
specified in the agreement relating to each ISO granted under the
Plan shall not be less than the fair market value per share of
Common Stock on the date of such grant. In the case of an ISO to be
granted to an employee owning stock possessing more than ten
percent of the total combined voting power of all classes of stock
of the Company or any Related Corporation, the price per share
specified in the agreement relating to such ISO shall not be less
than 110 percent of the fair market value per share of Common Stock
on the date of the grant.
C.
To the extent that
the aggregate fair market value (determined at the time the option
is granted) of stock with respect to which options meeting the
requirements of Section 422(b) are exercisable for the first time
by any individual during any calendar year exceeds $100,000, then
such options shall not be treated as incentive stock options
pursuant to Section 422(b). The preceding sentence shall be applied
by taking options into account in the order in which they were
granted.
D.
If, at the time an
Option is granted under the Plan, the Company's Common Stock is
publicly traded, “fair market value” shall be
determined as of the last business day for which the prices or
quotes discussed in this sentence are available prior to the date
such Option is granted and shall mean (i) the average (on that
date) of the high and low prices of the Common Stock on the
principal national securities exchange on which the Common Stock is
traded, if the Common Stock is then traded on a national securities
exchange; or (ii) the last reported sale price (on that date) of
the Common Stock on the NASDAQ National Market List, if the Common
Stock is not then traded on a national securities exchange; or
(iii) the closing bid price (or average of bid prices) last quoted
(on that date) by an established quotation service for
over-the-counter securities, if the Common Stock is not reported on
the NASDAQ National Market List. However, if the Common Stock is
not publicly traded at the time an Option is granted under the
Plan, “fair market value” shall be deemed by the
Committee after taking into consideration all factors which it
deems appropriate, including, without limitation, recent sale and
offer prices of the Common Stock in private transactions negotiated
at arm's length.
7.
Option Duration. Subject to
earlier termination as provided in paragraphs 9 and 10, each Option
shall expire on the date specified by the Committee, but not more
than (i) ten years from the date of grant in the case of
Non-Qualified Options, (ii) ten years from the date of grant in the
case of ISOs generally, and (iii) five years from the date of grant
in the case of ISOs granted to an employee owning stock possessing
more than ten percent of the total combined voting power of all
classes of stock of the Company or any Related Corporation. Subject
to earlier termination as provided in paragraphs 9 and 10, the term
of each ISO shall be the term set forth in the original instrument
granting such ISO, except with respect to any part of such ISO that
is converted into a Non-Qualified Option pursuant to paragraph
16.
8.
Exercise of Option. Subject to
the provisions of paragraphs 9 through 12, each Option granted
under the Plan shall be exercisable as follows:
A.
The Option shall
either be fully exercisable on the date of grant or shall become
exercisable thereafter in such installments as the Committee may
specify.
B.
Once an installment
becomes exercisable it shall remain exercisable until expiration or
termination of the Option, unless otherwise specified by the
Committee.
C.
Each Option or
installment may be exercised at any time or from time to time, in
whole or in part, for up to the total number of shares with respect
to which it is then exercisable.
D.
The Committee shall
have the right to accelerate the date of exercise of any
installment of any Option; provided that the Committee shall not
accelerate the exercise date of any installment of any Option
granted to any employee as an ISO (and not previously converted
into a Non-Qualified Option pursuant to paragraph 16) if such
acceleration would violate the annual vesting limitation contained
in Section 422A(b)(7) of the Code, as described in paragraph
6(c).
E.
With respect to any
Options granted to any officer or director of the Company pursuant
to subsection (iii) of paragraph 2.D. herein, at least six months
shall elapse from the date of the acquisition/grant of the Option
to the date of disposition of the Option (other than upon exercise
or conversion) or its underlying equity security.
9.
Termination of Employment. If
an ISO optionee ceases to be employed by the Company and all
Related Corporations other than by reason of death or disability as
defined in paragraph 10, no further installments of his ISOs shall
become exercisable, and his ISOs shall terminate after the passage
of 90 days from the date of termination of his employment, but in
no event later than on their specified expiration dates, except to
the extent that such ISOs (or unexercised installments thereof)
have been converted into Non-Qualified Options pursuant to
paragraph 16. Employment shall be considered as continuing
uninterrupted during any bona fide leave of absence (such as those
attributable to illness, military obligations or governmental
service) provided that the period of such leave does not exceed 90
days or, if longer, any period during which such optionee's right
to reemployment is guaranteed by statute. A bona fide leave of
absence with the written approval of the Committee shall not be
considered an interruption of employment under the Plan, provided
that such written approval contractually obligates the Company or
any Related Corporation to continue the employment of the optionee
after the approved period of absence. ISOs granted under the Plan
shall not be affected by any change of employment within or among
the Company and Related Corporations, so long as the optionee
continues to be an employee of the Company or any Related
Corporation. Nothing in the Plan shall be deemed to give any
grantee of any Stock Right the right to be retained in employment
or other service by the Company or any Related Corporation for any
period of time.
10.
Death; Disability.
A.
If an ISO optionee
ceases to be employed by the Company and all Related Corporations
by reason of his death, any ISO of his may be exercised, to the
extent of the number of shares with respect to which he could have
exercised it on the date of his death, by his estate, personal
representative or beneficiary who has acquired the ISO by will or
by the laws of descent and distribution, at any time prior to the
earlier of the ISO's specified expiration date or one year from the
date of the optionee's death.
B.
If an ISO optionee
ceases to be employed by the Company and all Related Corporations
by reason of his disability, he shall have the right to exercise
any ISO held by him on the date of termination of employment, to
the extent of the number of shares with respect to which he could
have exercised it on that date, at any time prior to the earlier of
the ISO's specified expiration date or one year from the date of
the termination of the optionee's employment. For the purposes of
the Plan, the term “disability” shall mean
“permanent and total disability” as defined in Section
22(e)(3) of the Code or successor statute.
11.
Assignability. No ISO shall be
assignable or transferable by the grantee except by will or by the
laws of descent and distribution, and during the lifetime of the
grantee each ISO shall be exercisable only by him. All other Stock
Rights shall be freely transferable subject to the limitations
imposed by subsection (iii) of paragraph 2.D. herein, if
applicable.
12.
Terms and Conditions of
Options. Options shall be evidenced by instruments (which
need not be identical) in such forms as the Committee may from time
to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 11 hereof and may
contain such other provisions as the Committee deems advisable
which are not inconsistent with the Plan, including restrictions
applicable to shares of Common Stock issuable upon exercise of
Options. In granting any Non-Qualified Option, the Committee may
specify that such Non-Qualified Option shall be subject to the
restrictions set forth herein with respect to ISOs, or to such
other termination and cancellation provisions as the Committee may
determine. The Committee may from time to time confer authority and
responsibility on one or more of its own members and/or one or more
officers of the Company to execute and deliver such instruments.
The proper officers of the Company are authorized and directed to
take any and all action necessary or advisable from time to time to
carry out the terms of such instruments.
13.
Adjustments. Upon the
occurrence of any of the following events, an optionee's rights
with respect to Options granted to him hereunder shall be adjusted
as hereinafter provided, unless otherwise specifically provided in
the written agreement between the optionee and the Company relating
to such Option:
A.
If the shares of
Common Stock shall be subdivided or combined into a greater or
small number of shares of it the Company shall issue any shares of
Common Stock as a stock dividend on its outstanding Common Stock,
the number of shares of Common Stock deliverable upon the exercise
of Options shall be appropriately increased or decreased
proportionately, and appropriate adjustments shall be made in the
purchase price per share to reflect such subdivision, combination
or stock dividend.
B.
If the Company is
to be consolidated with or acquired by another entity in a merger,
sale of all or substantially all of the Company's assets or
otherwise (an “Acquisition”), the Committee or
the Board of Directors of any entity assuming the obligations of
the Company hereunder (the “Successor Board”), shall, as to
outstanding Options, either (i) make appropriate provision for the
continuation of such Options by substituting on an equitable basis
for the shares then subject to such Options the consideration
payable with respect to the outstanding shares of Common Stock in
connection with the Acquisition; or (ii) upon written notice to the
optionees, provided that all Options must be exercised, to the
extent then exercisable, within a specified number of days of the
date of such notice, at the end of which period the Options shall
terminate; or (iii) terminate all Options in exchange for a cash
payment equal to the excess of the fair market value of the shares
subject to such Options (to the extent then exercisable) over the
exercise price thereof.
C.
In the event of a
recapitalization or reorganization of the Company (other than a
transaction described in subparagraph B above) pursuant to which
securities of the Company or of another corporation are issued with
respect to the outstanding shares of Common Stock, an optionee upon
exercising an Option shall be entitled to receive for the purchase
price paid upon such exercise the securities he would have received
if he had exercised his Option prior to such recapitalization or
reorganization.
D.
Notwithstanding the
foregoing, any adjustments made pursuant to subparagraphs A, B, or
C with respect to ISOs shall be made only after the Committee,
after consulting with counsel for the Company, determines whether
such adjustments would constitute a “modification” of
such ISOs (as that term is defined in Section 425 of the Code) or
would cause any adverse tax consequences for the holders of such
ISOs. If the Committee determines that such adjustments made with
respect to ISOs would constitute a modification of such ISOs, it
may refrain from making such adjustments.
E.
In the event of the
proposed dissolution or liquidating of the Company, each Option
will terminate immediately prior to the consummation of such
proposed action or at such other time and subject to such other
conditions as shall be determined by the Committee.
F.
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 or price of shares subject to
Options. No adjustments shall be made for dividends paid in cash or
in property other than securities of the Company.
G.
No fractional
shares shall be issued under the Plan and the optionee shall
receive from the Company cash in lieu of such fractional
shares.
H.
Upon the happening
of any of the foregoing events described in subparagraphs A, B, and
C above, the class and aggregate number of shares set forth in
paragraph 6 hereof that are subject to Stock Rights which
previously have been or subsequently may be granted under the Plan
shall also be appropriately adjusted to reflect the events
described in such subparagraphs. The Committee or the Successor
Board shall determine the specific adjustments to be made under
this paragraph 13 and, subject to paragraph 2, its determination
shall be conclusive.
If any
person or entity owning restricted Common Stock obtained by
exercise of a Stock Right made hereunder receives shares of
securities or cash in connection with a corporate transaction
described in subparagraphs A, B, or C above as a result of owning
such restricted Common Stock, such shares or securities or cash
shall be subject to all of the conditions and restrictions
applicable to the restricted Common Stock with respect to which
such shares or securities or cash were issued, unless otherwise
determined by the Committee or the Successor Board.
14.
Means of Exercising Stock
Rights. A Stock Right (or any part or installment thereof)
shall be exercised by giving written notice to the Company at its
principal office address. Such notice shall identify the Stock
Right being exercised and specify the number of shares to which
such Stock Right is being exercised, accompanied by full payment of
the purchase price therefor either (a) in United States dollars in
cash or by check, or (b) at the discretion of the Committee,
through delivery of shares of Common Stock having a fair market
value equal as of the date of the exercise to the cash exercise
price of the Stock Right, or (c) at the discretion of the
Committee, by delivery of the grantee's personal recourse note
bearing interest payable not less than annually at no less than
100% of the lowest applicable Federal rate, as defined in Section
1274 (d) of the Code, or a combination of (a), (b), and (c) above.
If the Committee exercises its discretion to permit payment of the
exercise price of an ISO by means of the methods set forth in
clauses (a), (b), or (c) of the preceding sentence, such discretion
shall be exercised in writing at the time of the grant of the ISO
in question. The holder of a Stock Right shall not have the rights
of a shareholder with respect to the shares covered by his Stock
Right until the date of issuance of a stock certificate to him for
such shares. Except as expressly provided above in paragraph 13
with respect to changes in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which
the record date is before the date such stock certificate is
issued.
15. Term
and Amendment of Plan. This Plan was adopted by the Board
and approved by the stockholders of the Company on June 15, 2010.
This Plan was subsequently amended seven times and all such
amendments received the necessary Board approval and stockholder
approval. On August 1, 2018, the Board restated this Plan to
incorporate the previous amendments into this Plan. The Plan shall
expire on June 14, 2020 (except as to Options outstanding on that
date). Subject to the provisions of paragraph 5 above, Stock Rights
may be granted under the Plan prior to the date of stockholder
approval of the Plan. The Board may terminate or amend the Plan in
any respect at any time, except that, without approval by the shareholders of the
Company to the extent shareholder approval is necessary to satisfy
any Applicable Laws obtained within 12 months before or
after the Board adopts a resolution authorizing any of the
following actions: (a) the total number of shares that may be
issued under the Plan may not be increased (except by adjustments
pursuant to paragraph 13); (b) the provisions of paragraph 3
regarding eligibility for grants of ISOs may not be modified
(except by adjustment pursuant to Paragraph 13); (c) the provisions
of paragraph 6 regarding the exercise price at which shares may be
offered pursuant to ISO's may not be modified (except by adjustment
pursuant to paragraph 13) and (d) the expiration date of the Plan
may not be extended. Except as provided in the fifth sentence of
this paragraph 15, in no event may action of the Board or
Stockholders alter or impair the rights of a grantee, without his
consent, under any Stock Right previously granted to him.
“Applicable
Laws” means
the requirements related to or implicated by the administration of
the Plan under applicable state corporate law, United States
federal and state securities laws, the Code, any stock exchange or
quotation system on which the shares of Common Stock are listed or
quoted, and the applicable laws of any foreign country or
jurisdiction where Stock rights are granted under the
Plan.
16. Conversion
of ISOs into Non-Qualified Options; Termination of ISOs.
The Committee, at the written request
of any optionee, may in its discretion take such actions as may be
necessary to convert such optionee's ISOs (or any installments or
portions of installments thereof) that have not been exercised on
the date of conversion into Non-Qualified Options at any time prior
to the expiration of such ISOs, regardless of whether the optionee
is an employee of the Company or a Related Corporation at the time
of such conversion. Such actions may include, but not be limited
to, extending the exercise period or reducing the exercise price of
the appropriate installments of such options; except that any
reduction in the exercise price of such options are subject to
approval by the stockholders of the Company at the next Meeting of
Stockholders. At the time of such conversion, the Committee (with
the consent of the Optionee) may impose such conditions on the
exercise of the resulting Non-Qualified Options as the Committee in
its discretion may determine, provided that such conditions shall
not be inconsistent with this Plan. Nothing in the Plan shall be
deemed to give any optionee the right to have such optionee's ISOs
converted into Non-Qualified Options, and no such conversion shall
occur until and unless the Committee takes appropriate action. The
Committee, with the consent of the optionee, may also terminate any
portion of any ISO that has not been exercised at the time of such
termination.
17.
Application of Funds. The
proceeds received by the Company from the sale of shares pursuant
to Options granted and Purchases authorized under the Plan shall be
used for general corporate purposes.
18.
Governmental Regulation. The
Company's obligation to sell and deliver shares of the Common Stock
under this Plan is subject to the approval of any governmental
authority required in connection with the authorization, issuance
or sale of such shares.
19.
Withholding of Additional Income
Taxes. Upon the exercise of a Non-Qualified Option, the
grant of an Award, the making of a Purchase of Common Stock for
less than its fair market value, the making of a Disqualifying
Disposition (as defined in paragraph 20) or the vesting of
restricted Common Stock acquired on the exercise of a Stock Right
hereunder, the Company, in accordance with Section 3402(a) of the
Code, may require the optionee, Award recipient or purchaser to pay
additional withholding taxes in respect of the amount that is
considered compensation includible in such person's gross income.
The Committee in its discretion may condition (i) the exercise of
an Option, (ii) the grant of an Award, (iii) the making of a
Purchase of Common Stock for less than its fair market value, or
(iv) the vesting of restricted Common Stock acquired by exercising
a Stock Right on the grantee's payment of such additional
withholding taxes.
20.
Notice to Company of Disqualifying
Disposition. Each employee who receives an ISO must agree to
notify the Company in writing immediately after the employee makes
a Disqualifying Disposition of any Common Stock acquired pursuant
to the exercise of an ISO. A Disqualifying Disposition is any
disposition (including any sale) of such Common Stock before the
later of (a) two years after the date the employee was granted the
ISO or (b) one year after the date the Common Stock was transferred
to the employee.
21.
Governing Law: Construction.
The validity and construction of the Plan and the instruments
evidencing Stock Rights shall be governed by the laws of the State
of Delaware. In construing this Plan, the singular shall include
the plural and the masculine general shall include the feminine and
neuter, unless the context otherwise requires.