1997 STOCK OPTION PLAN
(AS AMENDED AND RESTATED MARCH 29, 1999)
1. Establishment and Purpose.
(a) Establishment. The Quotesmith Corporation 1997 Stock Option Plan,
initially adopted and effective on _____, 1997, is amended and restated in its
entirety hereby and is renamed the Quotesmith.com Inc.1997 Stock Option Plan
(As Amended and Restated March 29, 1999). Options granted under this Plan may
be 'incentive stock options' intended to satisfy the requirements of Section
422 of the Code, or 'nonqualified options.'
(b) Purpose. The purposes of this Plan are to attract and retain the
best available personnel for positions of substantial responsibility, to
provide additional incentive to Employees, Directors and Consultants and to
promote the success of the Company's business. Options granted under the Plan
may be Incentive Stock Options or Nonqualified 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 of Directors of the Company and/or
Committee appointed by the Board pursuant to Section 4 of the Plan.
(b) 'Affiliate' means a parent or subsidiary corporation as defined in
the applicable provisions (currently Section 424(e) and (f), respectively) of
(c) 'Agreement' means the written agreement between the Company and an
Optionee evidencing the grant of an Option and setting forth the terms and
(d) 'Applicable Laws' means the requirements relating to the
administration of stock option plans under U.S. state corporate laws, U.S.
federal and state securities laws, the Code, any stock exchange or quotation
system on which the Common Stock is listed or quoted and the applicable laws of
any other country or jurisdiction where Options are granted under the Plan.
(e) 'Board' means the Board of Directors of the Company.
(f) 'Code' means the Internal Revenue Code of 1986, as amended.
(g) 'Committee' means a committee appointed by the Board to administer
the Plan in accordance with Section 4 hereof, and to perform the functions set
(h) 'Common Stock' means the Common Stock of the Company.
(i) 'Company' means Quotesmith.com Incorporated, a Delaware
(j) 'Consultant' means any person who is engaged by the Company or any
Affiliate to render consulting or advisory services and is compensated for such
(k) 'Director' means a member of the Board of Directors of the Company
or any of its Affiliates.
(l) 'Disability' means total and permanent disability as defined in
Section 22(e)(3) of the Code.
(m) 'Employee' means any person, including Officers and Directors,
employed by the Company or any Affiliate designated by the Administrator as
eligible to receive Options subject to the conditions set forth herein. For
purposes hereof, 'Employee' shall also include individuals who have not
commenced employment with the Company but have received an offer of employment
with the Company. A person shall not cease to be an Employee in the case of (i)
any leave approved by the Company or (ii) transfers between locations of the
Company or between the Company and its Affiliates. For purposes of ISOs, no
such leave may exceed ninety (90) days, unless reemployment upon expiration of
such leave is guaranteed by statute or contract. reemployment upon expiration
of a leave of absence as provided by the Company is not so guaranteed, on the
181st day of such leave any ISO held by the Optionee shall cease to be treated
as an ISO and shall be treated for tax purposes as a NQO. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute 'employment' by the Company.
(n) 'Exchange Act' means the Securities Exchange Act of 1934, as
(o) '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 or SmallCap Market of The Nasdaq Stock Market, its
Fair Market Value shall be the closing sales price for such stock (or
the closing bid, if no sales were reported) as quoted on such exchange
or system for the last market trading day prior to the time of
determination, as reported in The Wall Street Journal or such other
source as the Administrator deems reliable;
(ii) if the Common Stock is regularly quoted by a recognized
securities dealer but selling prices are not reported, its Fair Market
Value 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
(iii) in the absence of an established market for the Common
Stock, the Fair Market Value thereof shall be determined in good faith
by the Administrator.
(p) 'Incentive Stock Option' or 'ISO' means an Option satisfying the
requirements of Section 422 of the Code and designated by the Administrator as
an Incentive Stock Option.
(q) 'Nonqualified Stock Option' or 'NQO' means an Option that is not
an Incentive Stock Option.
(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
(s) 'Option' means a stock option granted pursuant to the Plan.
(t) 'Option Agreement' means an 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) 'Optioned Stock' means the Common Stock subject to an Option.
(v) 'Optionee' means a person to whom an Option has been granted under
(w) 'Parent' means a 'parent corporation' within the meaning of
Section 424(e) of the Code, whether now or hereafter existing.
(x) 'Plan' means the Quotesmith.com Inc. 1997 Stock Option Plan, as
amended and restated hereby.
(y) 'Plan Year' shall be a calendar year.
(z) 'Section 16(b)' means Section 16(b) of the Exchange Act.
(aa) 'Share' means a share of the Common Stock, as adjusted in
accordance with Section 11 of the Plan.
(bb) 'Subsidiary' means a 'subsidiary corporation' within the meaning
of Section 424(f) of the Code, whether now or hereafter existing.
(cc) 'Ten-Percent Stockholder' means an Employee, who, at the time an
Incentive Stock Option is to be granted to him or her, owns (within the meaning
of Section 422(b) (6) of the Code) stock possessing more than ten percent (10%)
of the total combined voting power of all classes of stock of the Company, or
3. Stock Subject to the Plan. Subject to Section 11 of the Plan, the
maximum aggregate number of Shares which may be subject to options and sold
under the Plan is One Million Five Hundred Thousand (1,500,000) Shares.
If an Option expires, is canceled, surrendered (without exercise)
or otherwise become unexercisable for any reason, the Shares allocable to the
canceled, surrendered or otherwise terminated Option may again be the subject
of Options granted hereunder (unless the Plan has terminated). However, Shares
that have actually been issued under the Plan, upon exercise of an Option,
shall not be returned to the Plan and shall not become available for future
distribution under the Plan. Shares that are retained by the Company upon
exercise of an Option in order to satisfy the exercise price for such Option or
any withholding taxes due with respect to such exercise shall be treated as not
issued and shall continue to be available under the Plan.
(a) Administrator. The Plan shall be administered by the Board
and/or by a duly appointed Committee of the Board having such powers
as shall be specified by the Board. A majority of a quorum of the
Board or Committee, as the case may be, may authorize any action.
(b) Compliance with Section 162(m) of the Code. In the event that
the Company is a 'publicly held corporation' as defined in paragraph
(2) of section 162(m) of the Code, as amended, and the regulations
promulgated thereunder ('Section 162(m)'), the Company may establish a
committee of outside directors meeting the requirements of Section
162(m) to approve the grant of Options which might reasonably be
anticipated to result in the payment of employee remuneration that
would otherwise exceed the limit on employee remuneration deductible
for income tax purposes pursuant to Section 162(m).
(c) Powers of the Administrator. Subject to the provisions of the
Plan and in the case of a Committee, the specific duties delegated by
the Board to such Committee, and subject to the approval of any
relevant authorities, the Administrator shall have the authority in
(i) to determine the Fair Market Value;
(ii) to select Employees, Directors and/or Consultants to whom
Options may from time to time be granted hereunder;
(iii) to determine the terms and conditions of any Option
granted hereunder. Such terms and conditions include, without
limitation, the exercise price, the time when Options may be exercised,
any vesting acceleration or waiver of forfeiture restrictions, and any
restriction or limitation regarding any Option or the Common Stock
relating thereto, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;
(iv) to determine the number of shares of Common Stock to be
covered by each such 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 Option granted hereunder;
(vii) to determine whether and under what circumstances an
Option may be settled in cash under Section 9(e) instead of Common
(viii) in order to fulfill the purposes of the Plan and without
amending the Plan, to modify grants of Options to participants who are
foreign nationals or employed outside of the United States in order to
recognize differences in local law, tax policies customs;
(ix) to allow Optionees to satisfy withholding tax obligations
as contemplated by Section 10 hereof;
(x) to construe and interpret the terms of the Plan and awards
granted pursuant to the Plan and to establish, amend and revoke rules
and regulations for the administration of the Plan, including, but
without limitation, correcting any defect or supplying any omission,
or reconciling any inconsistency in the Plan or in any Agreement, in
the manner and to the extent it shall deem necessary or advisable to
make the Plan fully effective;
(xi) to determine the duration and purposes for leaves of
absence which may be granted to an Optionee on an individual basis
without constituting a termination of employment or service for
purposes of the Plan;
(xii) to exercise its discretion with respect to the powers and
rights granted to it as set forth in the Plan; and
(xiii) generally, to exercise such powers and to perform such
acts as are deemed necessary or advisable to promote the best
interests of the Company with respect to the Plan.
(d) Effect of Administrator's Decision. All decisions,
determinations and interpretations of the Administrator shall be final, binding
and conclusive upon the Company and its Affiliates, the Optionees and all other
persons having any interest therein.
(e) Indemnification. The Administrator shall not be liable for any
action, failure to act, determination or interpretation made in good faith with
respect to this Plan or any transaction hereunder, except for liability arising
from his or her own willful misfeasance, gross negligence or reckless disregard
of his or her duties. The Company hereby agrees to indemnity the Administrator
for all costs and expenses and, to the extent permitted by applicable law, any
liability incurred in connection with defending against, responding to,
negotiation for the settlement of or otherwise dealing with any claim, cause of
action or dispute of any kind arising in connection with any actions in
administering this Plan or in authorizing or denying authorization to any
(a) Nonqualified Stock Options may be granted to Employees,
Directors or Consultants. Incentive Stock Options may be granted only to
(b) Each Option shall be designated in the Option Agreement as
either an Incentive Stock Option or a Nonqualified Stock Option. However,
notwithstanding such designation, to the extent that the aggregate Fair Market
Value of the Shares with respect to which Incentive Stock Options are
exercisable for the first time by the Optionee during any calendar year (under
all plans of the Company and any Affiliate) exceeds $100,000, such Options
shall be treated as Nonqualified Stock Options. For purposes of this Section
5(b), Incentive Stock Options shall be taken into account in the order in which
they were granted. The Fair Market Value of the Shares shall be determined as
of the time the Option with respect to such Shares is granted.
(c) The aggregate number of Options that may be granted to any
Optionee under the Plan shall not exceed fifty percent (50%) of the aggregate
number of Shares referred to in Section 3 hereof.
(d) Neither the Plan nor any Option shall not confer upon any
Optionee any right with respect to continuing the Optionee's relationship as an
Employee, Director or Consultant with the Company, nor shall it interfere in
any way with his or her right or the Company's right to terminate such
relationship at any time, with or without cause.
6. Term of Plan. The Plan shall become effective upon its adoption by
the Board. It shall continue in effect for a term of ten (10) years unless
sooner terminated under Section 14 of the Plan.
7. Term of Option. The term of each Option shall be the term stated in
the Option Agreement; provided, however, that the term shall be no more than
ten (10) years from the date it is granted (five (5) years in the case of an
Incentive Stock Option granted to a Ten-Percent Stockholder), or such shorter
term as the Administrator may, subsequent to the granting of any Option,
8. Option Exercise Price and Consideration.
(a) Exercise Price. The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be such price as is
determined by the Administrator, but shall be subject to the
(i) In the case of an Incentive Stock Option
(aa) granted to an Employee who is a Ten-Percent
Stockholder, the exercise price shall be no less than 110% of the
Fair Market Value per Share on the date of grant.
(bb) 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 Nonqualified Stock Option granted to an
Employee, Director or Consultant, the per Share exercise price
shall be no less than [85%] 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 other than as required above
pursuant to a merger or other corporate transaction.
(b) Payment of Option Price. The consideration to be paid for the
Shares to be issued upon exercise of an Option, including the method
of payment, shall be determined by the Administrator (and in the case
of an ISO, shall be determined at the time of grant). Such
consideration may consist of: (i) cash, by check, or cash equivalent,
(ii) promissory note, (iii) by tender to the Company of other Shares
owned by the Optionee 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,
as determined by the Administrator (but without regard to any
restrictions on transferability applicable to such stock by reason of
federal or state securities laws or agreements with an underwriter for
the Company), of not less than the option price of the Shares as to
which such Option shall be exercised (provided such tender of stock
would not constitute a violation of the provisions of any law,
regulation and/or agreement restricting the redemption of the Common
Stock), (iv) consideration received by the Company under a cashless
exercise program, (v) authorization for the Company to retain from the
total number of Shares as to which the Option is exercised that number
of Shares having a Fair Market Value on the date of exercise equal to
the exercise price for the total number of Shares as to which the
Option is exercised, or (vi) such other consideration and method of
payment for the issuance of Shares that may be permitted under
The Administrator shall have the authority to permit or require
the Optionee to secure any promissory note used to exercise an Option
with the Shares acquired on exercise of the Option and/or with other
collateral acceptable to the Company. In making its determination as
to the type of consideration to accept, the Administrator shall
consider if acceptance of such consideration may be reasonably
expected to benefit the Company. The Administrator may at any time or
from time to time grant Options which do not permit all of the
foregoing forms of consideration to be used in payment of the option
price and/or which otherwise restrict one or more forms of
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Shareholder. Any Option
granted hereunder shall be exercisable at such times and under such
conditions as determined by the Administrator, including 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 not be
exercised for a fraction of a Share.
An Option shall be deemed to be exercised when the Company
receives: (i) written or electronic 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, as authorized by the
Administrator, consist 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 Shares are
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
shareholder 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 upon exercise
of the Option. 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 11 of the Plan.
Exercise of an Option in any manner shall result in a decrease
in the number of Shares thereafter available, both for purposes of the
Plan and for sale under the Option, by the number of Shares as to
which the Option is exercised.
(b) Termination of Relationship as Employee, Director or
Consultant. If an Optionee ceases to be an Employee, Director or
Consultant, as the case may be, such Optionee may exercise his or her
Option within such period of time as is specified in the Option
Agreement to the extent that the Option is vested on the date of
termination (but in no event later than the expiration of the term of
the Option as set forth in the Option Agreement). In the absence of a
specified time in the Option Agreement, the Option shall remain
exercisable for three (3) months following the Optionee's termination.
If, on the date of termination, the Optionee is not vested as to his
or her entire Option, the Shares covered by the unvested 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. No termination shall
be deemed to occur if (i) the Optionee is a Consultant or Director who
becomes an Employee within the time specified herein; or (ii) the
Optionee is an Employee who becomes a Consultant or Director who is
not also an employee, within the time specified herein.
(c) Disability of Optionee. If an Optionee ceases to be an
Employee, Director or Consultant as a result of Optionee's Disability,
the Optionee may within six (6) months from the date of such
termination (but in no event later than the expiration date of the
term of such Option as set forth in the Option Agreement), exercise an
Option to the extent otherwise entitled to exercise it at the date of
such termination. To the extent that Optionee is not entitled to
exercise the Option on the date of termination, or if Optionee does
not exercise such Option to the extent so entitled 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. If an Optionee dies while an Employee,
Director or Consultant, the Option may be exercised at any time within
six (6) months following the date of death (but in no event later than
the expiration date of the term of such Option as set forth in the
Option Agreement), to the extent the Optionee was vested on the date
of death. If, at the time of death, Optionee is not vested as to the
entire Option, the Shares covered by the unvested portion of the
Option shall revert to the Plan. The Option may be exercised by the
executor or administrator of the Optionee's estate or, if none, by the
person(s) entitled to exercise the Option under the Optionee's will or
under the laws of descent and distribution. If the Option is not so
exercised within the time specified herein, the Option shall
terminate, and the Shares covered by such Option shall revert to the
(e) Buyout Provisions. The Administrator may at any time offer
to buy out for a payment in cash or Shares, an Option previously
granted, based on such terms and conditions as the Administrator shall
establish and communicate to the Optionee at the time that such offer
10. Withholding to Satisfy Tax Obligations.
(a) Permitted Methods. At the discretion of the Administrator,
Optionees may satisfy withholding obligations as provided in this
Section 10. When an Optionee incurs tax liability in connection with
an Option, which tax liability is subject to tax withholding under
applicable tax laws, and the Optionee is obligated to pay the Company
an amount required to be withheld under applicable tax laws, the
Optionee may satisfy the withholding tax obligation by one or some
combination of the following methods: (i) by cash payment; (ii) out of
Optionee's current compensation; (iii) if permitted by the
Administrator, in its discretion, by surrendering to the Company
Shares that (A) in the case of Shares previously acquired from the
Company, 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 or less than Optionee's marginal tax rate times the
ordinary income recognized; or (iv) by electing to have the Company
withhold from the Shares to be issued upon exercise of the Option, if
any, that number of Shares having a Fair Market Value equal to the
amount of withholding due. 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.
(b) Procedures for Stock Withholding. All elections by an Optionee
to have Shares withheld to satisfy tax withholding obligations shall
be made in writing in a form acceptable to the Administrator and shall
be subject to the following restrictions: (i) the election must be
made on or prior to the applicable tax withholding date; (ii) once
made, the election shall be irrevocable as to the particular Shares of
the Option as to which the election is made; (iii) all elections shall
be subject to the consent or disapproval of the Administrator; (iv) if
the Optionee is an Officer, Director or greater than Ten-Percent
Stockholder within the meaning of Rule 16a-2 under the Exchange Act
('Reporting Person'), the election must comply with the applicable
provisions of Rule 16b-3 and shall be subject to such additional
conditions or restrictions as may be required thereunder to qualify
for the maximum exemption from Section 16 of the Exchange Act with
respect to Plan transactions.
11. Adjustments upon Changes in Capitalization, Merger or Certain
(a) Changes in Capitalization. Subject to any required action
by the shareholders of the Company, the number and class of shares of
Common Stock with respect to which Options may be granted under the
Plan, the number and class of Shares of Common Stock which are subject
to outstanding Options granted under the Plan, and the purchase price
per Share of Common Stock , if applicable, 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.
The conversion of any convertible securities of the Company shall not
be deemed to have been 'effected without receipt of consideration.'
Any such adjustment in the Shares subject to outstanding Incentive
Options (including any adjustments in the purchase price) shall be
made in such manner as not to constitute a modification as defined by
Section 424(h)(3) of the Code and only to the extent otherwise
permitted by Sections 422 and 424 of the Code. Adjustments shall be
made by the Administrator, whose determination in that respect shall
be final, binding and conclusive. If, by reason of a change in
Capitalization, an Optionee shall be entitled to exercise an Option
with respect to new, additional or different shares of stock, such
new, additional or different shares shall thereupon be subject to all
of the conditions which were applicable to the Shares subject to the
Option, as the case may be, prior to such Change in Capitalization.
(b) Dissolution or Liquidation. In the event of the proposed
dissolution or liquidation of the Company, the Administrator shall
notify each Optionee as soon as practicable prior to the effective
date of such proposed action. The Administrator in its discretion may
provide for an Optionee to have the right to exercise his or her
Option until fifteen (15) days prior to such transaction as to all of
the Optioned Stock covered thereby, including Shares as to which the
Option would not otherwise be exercisable. To the extent it has not
been previously exercised, an Option will terminate immediately prior
to the consummation of such proposed action.
(c) Merger or Sale of Assets. If the Company is to be consolidated
with or acquired by another entity in a merger or other reorganization
in which the holders of the outstanding voting stock of the Company
immediately preceding the consummation of such event, shall,
immediately following such event, hold, as a group, less than a
majority of the voting securities of the surviving or successor
entity, or in the event of a sale of all or substantially all of the
Company's assets or otherwise (each, a 'Change-of-Control'), then all
outstanding Options, whether or not then vested or exercisable, shall
be deemed to be vested and exercisable immediately prior to the
(d) Certain Distributions. In the event of any distribution to the
Company's shareholders of securities of any other entity or other
assets (other than dividends payable in cash or stock of the Company)
without receipt of consideration by the Company, the Administrator
may, in its discretion, appropriately adjust the price per share of
Common Stock covered by each outstanding Option to reflect the effect
of such distribution.
12. Non-Transferability of Options. Except as otherwise provided in
this Section, Options 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 or purchased during the lifetime
of the Optionee, only by the Optionee. Notwithstanding the foregoing, the
Administrator may, in its discretion, authorize all or a portion of the Options
to be granted to an Optionee to be transferred by such Optionee to (i) the
spouse, children or grandchildren of such Optionee ('Immediate Family
Members'), (ii) a trust of trusts for the benefit of an Immediate Family
Member, or (iii) a partnership in which Immediate Family Members are the only
partners, provided, that (x) there is no consideration for such transfer, (y)
the Option Agreement expressly provides for
the transfer of the Options in accordance with this Section, and (z) subsequent
transfers of such Options are prohibited except by or in accordance with the
laws of descent or distribution.
13. Time of Granting Options. The date of grant of an Option shall,
for all purposes, be the date on which the Administrator makes the
determination granting such Option, or such other date as is determined by the
Administrator. Notice of the determination shall be given to each Employee,
Director or Consultant to whom an Option is so granted within a reasonable time
after the date of such grant.
14. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board or the Administrator may
at any time amend, alter, suspend or terminate the Plan.
(b) Shareholder Approval. To the extent necessary and desirable to
comply with Applicable Laws, the Company shall obtain shareholder
approval of any Plan amendment in such a manner and to such a degree
(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. Termination of the Plan shall not affect
the Administrator's ability to exercise the powers granted to it
hereunder with respect to Options granted under the Plan prior to the
date of such termination.
15. Conditions Upon Issuance of Shares.
(a) Legal Compliance. 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 of 1933, as amended, the Exchange Act, the rules
and regulations promulgated thereunder, and the requirements of any
(b) Investment Representations. As a condition to the exercise of
an Option, the Administrator may require the person exercising such
Option to represent and warrant to the Company in writing at the time
of any such exercise that the Shares are being purchased only for
investment and without any present intention to sell or distribute
such Shares, and will not be sold or transferred other than pursuant
to an effective registration thereof under the Exchange Act or
pursuant to an exemption applicable under the Securities Act of 1933,
as amended, or the rules and regulations promulgated thereunder. The
certificates evidencing any such Shares shall be appropriately
legended to reflect their status as restricted securities.
16. Regulations and Other Approvals; Governing Law.
(a) This Plan and the rights of all persons claiming hereunder
shall be construed and determined in accordance with the laws of the
State of Illinois.
(b) The obligation of the Company to sell or deliver Shares with
respect to Options granted under the Plan shall be subject to all
Applicable Laws, and the obtaining of all such approvals by
governmental agencies as may be deemed necessary or appropriate by the
(c) 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.
(d) The Plan is intended to comply with Rule 16b-3 promulgated
under the Exchange Act and the Administrator shall interpret and
administer the provisions of the Plan or any Agreement in a manner
consistent therewith. Any provisions inconsistent with such Rule shall
be inoperative and shall not affect the validity of the Plan.
(e) The Administrator may make such changes as may be necessary or
appropriate to comply with the rules and regulations of any government
authority, or to obtain for Employees granted Incentive Stock Options
the tax benefits under the applicable provisions of the Code and
regulations promulgated thereunder.
17. Reservation of Shares. The Company, during the term of this Plan,
shall at all times reserve and keep available such number of Shares as shall be
sufficient to satisfy the requirements of the Plan.
18. Agreements. Options shall be evidenced by written agreements in
such form as the Administrator shall approve from time to time.
19. Shareholder Approval. The Plan, as amended and restated, shall be
subject to approval by the shareholders of the Company within twelve (12)
months after the date the Plan is so amended and restated. Such shareholder
approval shall be obtained in the degree and manner required under Applicable
Law. All Options issued under the Plan shall become void in the event such
approval is not obtained.