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SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14(c) INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.______)
Check the appropriate box:
[ ] Preliminary information statement [ ] Confidential, for use of the Commission only (as
permitted by Rule 14c-5(d)(2)).
[X] Definitive information statement
U S INDUSTRIAL SERVICES, INC.
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(Name of Registrant as Specified in Its Charter)
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Payment of Filing Fee (check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials
[ ] Check box if any part of the fee is offset by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the form or
schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(4) Date filed:
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U S INDUSTRIAL SERVICES, INC.
TO OUR STOCKHOLDERS:
This Information Statement is being provided to the stockholders of U S
Industrial Services, Inc., a Delaware corporation (the "Company"). The Company's
Board of Directors and the holders of a majority of its issued and outstanding
shares of common stock have approved:
1. the amendment and restatement of the Company's Certificate of
Incorporation to:
(a) change the name of the Company to Nextgen
Communications Corporation;
(b) increase the number of authorized shares of common
stock from 25,000,000 to 50,000,000 shares; and
(c) change the stated par value of the Company's common
and preferred stock from $.01 to $.001 per share;
2. the Company's 2001 Stock Plan, and reserved 2,000,000 shares
of the Company's common stock for issuance thereunder.
Pursuant to statutes and regulations governing the Company, we are
sending you this Information Statement, which describes the purpose and effect
of the aforementioned actions. No action whatsoever is required on your part. We
thank you for your continued interest in the Company.
For the Board of Directors of
U S INDUSTRIAL SERVICES, INC.
/s/ FRANK J. FRADELLA
-----------------------------------------
Frank J. Fradella
President, Chief Executive Officer and
Chairman of the Board
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U S INDUSTRIAL SERVICES, INC.
11850 Jones Road
Houston, Texas 77070
(281) 807-5033
INFORMATION STATEMENT
This information statement (this "Information Statement") is being
furnished to all holders of record as of June 15, 2001 (the "Record Date") of
the common stock, $.01 par value per share (the "Common Stock") of U S
Industrial Services, Inc., a Delaware corporation (the "Company"), in order to
comply with the requirements of Section 14(c) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), Regulation 14C, promulgated under the
Exchange Act, and Section 228 of the Delaware General Corporation Law, as
amended (the "DGCL"). The purpose of the Information Statement is to inform all
stockholders of the following actions, which have been approved by the required
consent of the holders of a majority of the outstanding Common Stock as of the
Record Date:
(1) the approval of the amendment and restatement of the Company's
Certificate of Incorporation to (a) change the Company's name from "U S
Industrial Services, Inc." to "Nextgen Communications Corporation" (the "Name
Change"), (b) increase the number of authorized shares of Common Stock from
25,000,000 to 50,000,000 (the "Share Increase"), and (c) decrease the par value
of the Company's Common Stock and preferred stock from $.01 to $.001 per share
(the "Par Value Reduction"); and
(2) the approval and adoption of the Company's 2001 Stock Plan, and
reservation of 2,000,000 shares of the Company's Common Stock for issuance
thereunder.
This information statement is first being sent to stockholders on or
about July 9, 2001.
WE ARE NOT ASKING YOU FOR A PROXY, AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The Company's Board of Directors (the "Board of Directors") has
approved, by unanimous written consent dated June 14, 2001, the Name Change,
Share Increase, Par Value Reduction, and 2001 Stock Plan. The Company is not
seeking consent, authorization or proxies from you, since the Company has
obtained the written consent of a majority of the holders of the Company's
Common Stock, in lieu of a special meeting of the stockholders, as allowed by
Section 228 of the DGCL. The number of shares of the Company's Common Stock
outstanding as of the Record Date was 8,763,982 shares; the number of shares
that consented to the aforementioned actions was 4,401,747, representing
approximately 50.2% of the outstanding shares of Common Stock of the Company.
The Company proposes to file its amended and restated Certificate of
Incorporation (the "Restated Certificate") with the Delaware Secretary of State
20 days after the mailing date of the Information Statement, which the Company
anticipates will be on or before July 31, 2001.
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THE NAME CHANGE
The Board of Directors and persons holding a majority of the issued and
outstanding shares of the Company's Common Stock have approved the Name Change.
The purpose of the Name Change is to signify the Company's new direction, which
is providing communications infrastructure services. Nextgen Communications
Corporation is descriptive of the services that the Company will be providing,
whereas the Company's present name signifies a line of services no longer
provided by the Company. The Name Change will become effective upon the filing
of the Restated Certificate, the form of which is attached hereto as Exhibit A,
with the Delaware Secretary of State.
Following the Name Change, the Company will change the trading symbol
of the Common Stock from "USIS" to a more appropriate symbol. Share certificates
currently held by stockholders will continue to be valid. In the future, new
share certificates will contain a legend noting the change in name or will be
issued bearing the new name.
THE SHARE INCREASE
The Board of Directors and persons holding a majority of the issued and
outstanding shares of the Company's Common Stock have approved the Share
Increase. The Share Increase will provide additional shares of authorized Common
Stock that can be issued by the Board of Directors in connection with strategic
acquisitions and financing transactions. The Company is at various stages of
negotiations with several acquisition candidates, but the Share Increase is not
necessary to close any or all of the acquisitions currently under consideration.
The Share Increase will become effective upon the filing of the Restated
Certificate with the Delaware Secretary of State. The Company cannot estimate
whether the Share Increase will have an impact on the market value of the
Company's Common Stock.
THE PAR VALUE REDUCTION
The Board of Directors and persons holding a majority of the issued and
outstanding shares of the Company's Common Stock have approved the Par Value
Reduction. The Par Value Reduction should avoid an increase in certain fees that
would otherwise result from the Company's increased stated capital following the
Share Increase. The Par Value Reduction will become effective upon the filing of
the Restated Certificate with the Delaware Secretary of State, and will not
affect the market value of the Company's Common Stock.
Stockholders need not exchange their existing stock certificates.
However, after the effective date of the actions contemplated herein, any
stockholders desiring new stock certificates may submit their existing stock
certificates to the Company's transfer agent, American Stock Transfer & Trust
Co., Attn: Stock Transfer Department, 59 Maiden Lane, Plaza Level, New York, New
York 10038, for cancellation and exchange for new certificates.
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EFFECTIVENESS OF AMENDMENTS
The Company reserves the right, upon notice to stockholders, to
abandon or modify the Restated Certificate at any time prior to its filing with
the Delaware Secretary of State, upon consent of the Board of Directors and the
holders of a majority of the existing Common Stock then issued and outstanding.
2001 STOCK PLAN APPROVAL
The Board of Directors and persons holding a majority of the issued and
outstanding shares of the Company's Common Stock have approved the 2001 Stock
Plan. The purpose of the 2001 Stock Plan is to create an equity-based incentive
program for the Company's employees in order to increase loyalty and
productivity in the workplace, and to have the flexibility of offering stock
options to non-employees for various strategic purposes. The Board of Directors
has reserved 2,000,000 shares of Common Stock for issuance upon exercise of
grants made under the 2001 Stock Plan. Such awards can be in the form of
incentive stock options, nonqualified stock options, and restricted stock
purchase rights. The 2001 Stock Plan was approved by the Board of Directors on
April 2, 2001, on which date grants of restricted stock purchase rights were
made to certain officers of the Company, subject to the approval of the
Company's stockholders. Stockholder approval shall be effective upon the
expiration of 20 calendar days following the date this Information Statement is
mailed to the Company's stockholders. The form of the 2001 Stock Plan is
attached hereto as Exhibit B.
EXECUTIVE OFFICES
The Company's principal executive offices are located at 11850 Jones
Road, Houston, Texas 77070. Its telephone number is (281) 807-5033.
DESCRIPTION OF CAPITAL STOCK AND VOTING RIGHTS
The Company's authorized capital currently consists of 25,000,000
shares of Common Stock and 1,000,000 shares of preferred stock, $.01 par value.
As of the Record Date, there were 8,763,982 shares of Common Stock outstanding
and no shares of preferred stock outstanding. The holders of Common Stock are
entitled to vote on all matters to come before a vote of the stockholders of the
Company. Each share of Common Stock entitles the holder thereof to one vote on
all matters submitted to stockholders for a vote. Upon effectiveness of the
Share Increase and Par Value Reduction, the Company's authorized capital will
consist of 50,000,000 shares of Common Stock and 1,000,000 shares of preferred
stock, each share of which will have a par value per share of $.001.
NUMBER OF HOLDERS OF COMMON STOCK
As of the Record Date, there were 91 holders of record of Common
Stock, although the Company believes that there may be a significantly greater
number of beneficial owners of Common Stock.
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PRINCIPAL STOCKHOLDERS
The following table sets forth information with respect to the
beneficial ownership of the Common Stock outstanding as of the Record Date,
respectively, by (i) each of our directors, (ii) each of our executive officers,
(iii) all of our directors and executive officers as a group and (iv) each
person known to us to own more than 5% of the Common Stock outstanding. In
accordance with the rules promulgated by the Securities and Exchange Commission
("SEC"), the ownership includes shares currently owned as well as shares that
the named person has the right to acquire beneficial ownership of within 60
days, including through the exercise of options, warrants or other rights, or
through the conversion of a security. Unless otherwise indicated, the business
address of each person listed is 11850 Jones Road, Houston, Texas 77070.
Shares Beneficially Owned
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Name of Beneficial Owner Number Percent(1)
-------------------------------------------- --------- ----------
Frank J. Fradella (Chairman, President,
and Chief Executive Officer) 2,752,651(2) 31.4%
Tyrrell L. Garth 1,299,096(3) 14.8%
Leonard Feldman 1,100,000(4) 12.6%
Kathleen L. Harris (Chief Financial Officer) 235,350(5) 2.7%
Richard M. Lancaster (Director) 0 --
All directors and executive
officers as a group (3 persons) 2,988,001 34.1%
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(1) Based on 8,763,982 shares of Common Stock outstanding on June 15, 2001.
(2) Mr. Fradella's number of shares includes: (a) 500,000 shares of Common Stock
that may be acquired at any time upon the exercise of restricted stock purchase
rights, granted under the 2001 Stock Plan; and (b) options for 250,000 shares of
Common Stock that are immediately exercisable, granted under the 1998 Stock
Option Plan.
(3) Based on a Schedule 13D filed on May 1, 2001. Mr. Garth's business address,
as set forth in his Schedule 13D, is c/o Cheyenne Capital, 350 Dowlen Road,
Suite 200, Beaumont, Texas 77706.
(4) Based on a Schedule 13D filed on May 14, 2001. Mr. Feldman's business
address, as set forth in his Schedule 13D, is 2081 Magnolia Lane, Highland Park,
Illinois 60035.
(5) Ms. Harris's number of shares includes 75,000 shares of Common Stock that
may be acquired at any time upon the exercise of restricted stock purchase
rights granted under the 2001 Stock Plan.
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INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Frank J. Fradella, the Chairman, President and Chief Executive Officer
of the Company, and also one of the stockholders providing written consent to
the actions described herein, was granted restricted stock purchase rights to
purchase 500,000 shares of Common Stock pursuant to the 2001 Stock Plan, on
April 2, 2001.
CHANGE OF CONTROL
As disclosed in the Company's Current Report on Form 8-K filed on April
26, 2001, on March 23, 2001, Frank J. Fradella, acting in both an individual
capacity and as third-party nominee, purchased 3,337,929 shares of Common Stock
from Deere Park Capital, L.L.C. ("Deere Park"). The result of this transaction
and prior transactions with Deere Park was a shift in the ability to control the
Company from Deere Park to the persons listed above under "Principal
Stockholders".
MATERIAL INCORPORATED BY REFERENCE
The following documents, and other materials filed by the Company with
the SEC, are incorporated into and specifically made a part of this Information
Statement by reference:
1. The Company's Annual Report on Form 10-K for the fiscal year ended
September 30, 2000;
2. The Company's Quarterly Reports on Form 10-Q for the transition
period from October 1, 2001 to December 31, 2000, and the quarterly period ended
March 31, 2001; and
3. The Company's Current Report on Form 8-K filed on April 26, 2001,
for an event that occurred March 23, 2001.
All documents filed by the Company with the SEC after the date of this
Information Statement shall be deemed to be incorporated by reference into this
Information Statement and to be a part hereof from the dates of filing such
documents or reports. Any statement contained herein or in a document
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Information Statement to the extent that a statement
contained herein or in any other subsequently filed document that is also
incorporated or deemed to be incorporated herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Information
Statement.
Dated: July 9, 2001 By order of the Board of Directors,
/s/ FRANK J. FRADELLA
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Frank J. Fradella
Chairman of the Board
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EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
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Exhibit A Form of Restated Certificate of Incorporation of U S Industrial
Services, Inc.
Exhibit B Form of 2001 Stock Plan of U S Industrial Services, Inc.
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EXHIBIT A
U S INDUSTRIAL SERVICES, INC.
RESTATED CERTIFICATE OF INCORPORATION
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U S Industrial Services, Inc., a corporation organized and existing
under the laws of the State of Delaware (this "Corporation"), hereby certifies
as follows:
A. The name of this Corporation is U S Industrial Services, Inc. This
Corporation filed its original Certificate of Incorporation with the Delaware
Secretary of State on January 9, 1998.
B. This Restated Certificate of Incorporation was duly adopted by this
Corporation's directors and stockholders in accordance with the applicable
provisions of Sections 228, 242 and 245 of the Delaware General Corporation Law
(the "DGCL").
C. This Restated Certificate of Incorporation restates, integrates and
amends the provisions of the Certificate of Incorporation of this Corporation,
as heretofore amended.
D. The text of the Certificate of Incorporation, as heretofore amended,
is hereby amended and restated in its entirety to read as follows:
FIRST: Name. The name of the corporation is Nextgen Communications
Corporation (hereinafter referred to as the "Corporation").
SECOND: Registered Office. The registered office of the Corporation is
to be located in the City of Wilmington, County of New Castle, in the State of
Delaware. The name of its registered agent is Corporation Service Company, whose
address is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808.
THIRD: Purpose. The purpose of the Corporation is to engage in any
lawful act or activity for which corporations may be organized under the General
Corporation Law of the State of Delaware.
FOURTH: Capital Stock. The total number of shares of stock which the
Corporation shall have authority to issue is fifty million (50,000,000) shares
of common stock, $.001 par value per share (hereinafter referred to as "Common
Stock") and one million (1,000,000) shares of preferred stock, $.001 par value
per share (hereinafter referred to as "Preferred Stock").
A. Provisions relating to Preferred Stock. Shares of Preferred
Stock may be issued from time to time in series, and the Board of Directors of
the Corporation is hereby authorized, subject to the limitations provided by
law, to establish and designate one or more series of the Preferred Stock, to
fix the number of shares constituting each series, and to fix the designations,
powers, preferences and relative, participating, optional or other special
rights, and qualifications, limitations or restrictions thereof, of each series
and the variations and the relative rights, preferences and limitations as
between series, and to increase and to decrease the number of shares
constituting each series. The authority of the Board of Directors of the
Corporation with respect to each series shall include, but shall not be limited
to, the authority to determine the following:
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(i) The designation of such series.
(ii) The number of shares initially constituting such
series.
(iii) The increase, and the decrease to a number not
less than the number of the outstanding shares of such series, of the number of
shares constituting such series theretofore fixed.
(iv) The rate or rates, and the conditions upon and
the times at which dividends on the shares of such series shall be paid, the
preference or relation which such dividends shall bear to the dividends payable
on any other class or classes or on any other series of stock of the
Corporation, and whether or not such dividends shall be cumulative, and, if such
dividends shall be cumulative, the date or dates from and after which they shall
accumulate.
(v) Whether or not the shares of such series shall be
redeemable, and, if such shares shall be redeemable, the terms and conditions of
such redemption, including, but not limited to, the date or dates upon or after
which such shares shall be redeemable and the amount per share which shall be
payable upon such redemption, which amount may vary under different conditions
and at different redemption dates.
(vi) The rights to which the holders of the shares of
such series shall be entitled upon the voluntary or involuntary liquidation,
dissolution or winding up of, or upon any distribution of the assets of, the
Corporation, which rights may be different in the case of a voluntary
liquidation, dissolution or winding up than in the case of such an involuntary
event.
(vii) Whether or not the shares of such series shall
have voting rights, in addition to the voting rights provided by law, and, if
such shares shall have such voting rights, the terms and conditions thereof,
including, but not limited to, the right of the holders of such shares to vote
as a separate class either alone or with the holders of shares of one or more
other series of Preferred Stock and the right to have more than one vote per
share.
(viii) Whether or not a sinking fund or a purchase
fund shall be provided for the redemption or purchase of the shares of such
series, and, if such a sinking fund or purchase fund shall be provided, the
terms and conditions thereof.
(ix) Whether or not the shares of such series shall
be convertible into, or exchangeable for, shares of any other class or classes
or any other series of the same or any other class or classes of stock of the
corporation, and, if provision be made for conversion or exchange, the terms and
conditions of conversion or exchange, including, but not limited to, any
provision for the adjustment of the conversion or exchange rate or the
conversion or exchange price.
(x) Any other relative rights, preferences and
limitations.
B. Provisions relating to Common Stock.
(i) Subject to the preferential dividend rights
applicable to shares of the Preferred Stock, as determined by the Board of
Directors of the Corporation pursuant to the
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provisions of part A of this Article FOURTH, the holders of shares of the Common
Stock shall be entitled to receive such dividends as may be declared by the
Board of Directors of the Corporation.
(ii) Subject to the preferential liquidation rights
and except as determined by the Board of Directors of the Corporation pursuant
to the provisions of part A of this Article FOURTH, in the event of any
voluntary or involuntary liquidation, dissolution or winding up of, or any
distribution of the assets of, the Corporation, the holders of shares of the
Common Stock shall be entitled to receive all of the assets of the Corporation
available for distribution to its stockholders ratably in proportion to the
number of shares of the Common Stock held by them.
(iii) Except as otherwise determined by the Board of
Directors of the Corporation pursuant to the provisions of part A of this
Article FOURTH, the holders of shares of the Common Stock shall be entitled to
vote on all matters at all meetings of the stockholders of the Corporation, and
shall be entitled to one vote for each share of the Common Stock entitled to
vote at such meeting, voting together with the holders of the Preferred Stock
who are entitled to vote, and not as a separate class.
FIFTH: Compromise. Whenever a compromise or arrangement is proposed
between this Corporation and its creditors or any class of them and/or between
this Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for this Corporation
under the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as a consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
SIXTH: Board of Directors and Bylaws. All corporate powers shall be
exercised by the Board of Directors, except as otherwise provided by statute, by
this Certificate of Incorporation, by the Bylaws, or by any agreement among all
of the stockholders. The Bylaws may be adopted, amended or repealed by the Board
of Directors of the Corporation, except as otherwise provided by law, but any
by-law made by the Board of Directors is subject to amendment or repeal by the
stockholders of the Corporation.
SEVENTH: Limited Liability. A director of the Corporation shall not be
personally liable to the Corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability (i) for any
breach of the director's duty of loyalty to the Corporation or its stockholders,
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or a
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knowing violation of law, (iii) under Section 174 of the Delaware General
Corporation Law, or (iv) for any transaction from which the director derived any
improper personal benefit. If the Delaware General Corporation Law is hereafter
amended to authorize corporate action further eliminating or limiting the
personal liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the Delaware General Corporation Law, as so amended.
Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect any right or
protection of a director of the Corporation existing at the time of such repeal
or modification.
EIGHTH: Indemnification. The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened, pending
or complete action, suit or proceeding, whether civil, criminal, administrative
or investigative, or by or in the right of the Corporation to procure judgment
in its favor, by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in or not opposed to the best interests of the Corporation, in accordance
with and to the full extent permitted by statute. Expenses (including attorneys'
fees) incurred in defending any civil, criminal, administrative or investigative
action, suit or proceeding may be paid by the Corporation in advance of the
final disposition of such action, suit or proceeding as authorized by the Board
of Directors in the specific case upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
Corporation as authorized in this Article. The indemnification provided by this
Article shall not be deemed exclusive of any other rights to which those seeking
indemnification may be entitled under this Certificate of Incorporation or any
agreement or vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
IN WITNESS WHEREOF, the Corporation has caused this Certificate to be
signed by its President on July __, 2001.
NEXTGEN COMMUNICATIONS CORPORATION
--------------------------------------------
Frank J. Fradella
President and Chief Executive Officer
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EXHIBIT B
U S INDUSTRIAL SERVICES, INC.
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2001 STOCK PLAN
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1. Purposes of the Plan. The purposes of this 2001 Stock 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 Nonstatutory
Stock Options, as determined by the Administrator at the time of grant. Stock
Purchase Rights may also be granted under the Plan.
2. Definitions. As used herein, the following definitions
shall apply:
(a) "Administrator" means the Board or any of its
Committees as shall be administering the Plan in accordance with Section 4
hereof.
(b) "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 foreign country or jurisdiction where Options or Stock
Purchase Rights are granted under the Plan.
(c) "Board" means the Board of Directors of the
Company.
(d) "Cashless Exercise" means an exercise by an
Optionee of an Option or Options together with a simultaneous surrender to the
Company by such Optionee of a number of Shares, received by such Optionee
pursuant to such exercise, with a Fair Market Value equal to (i) the per share
exercise price of the Shares at the time of such exercise as determined in
accordance with Section 8(a) of the Plan, times (ii) the number of Shares such
Optionee receives (including the Shares to be simultaneously surrendered upon
such exercise) upon such exercise.
(e) "Cause" means (i) the Optionee's or Purchaser's
continued failure to substantially perform the principal duties and obligations
of his or her position with the Company (other than any such failure resulting
from Disability); (ii) any act of personal dishonesty, fraud or
misrepresentation taken by the Optionee or Purchaser which was intended to
result in substantial gain or personal enrichment of the Optionee or Purchaser
at the expense of the Company; (iii) the Optionee's or Purchaser's violation of
a federal or state law or regulation applicable to the Company's business which
violation was or is reasonably likely to be injurious to the Company; (iv) the
Optionee's or Purchaser's conviction of a felony or a plea of nolo contendere
under the laws of the United States or any State; or (v) the Optionee's or
Purchaser's breach of the terms of the Optionee's or Purchaser's proprietary
information and inventions assignment agreement with the Company, if any.
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(f) Change of Control. "Change of Control" means (i)
the acquisition of the Company by another entity by means of any transaction or
series of related transactions (including, without limitation, any
reorganization, merger or consolidation, but excluding any merger effected
primarily for the purpose of changing the domicile of the Company), unless the
Company's stockholders of record as constituted immediately prior to such
transaction or series of related transactions will, immediately after such
transaction or series of related transactions hold at least a majority of the
voting power of the surviving or acquiring entity or (ii) a sale of all or
substantially all of the assets of the Company.
(g) "Code" means the Internal Revenue Code of 1986,
as amended.
(h) "Committee" means a committee of Directors
appointed by the Board in accordance with Section 4 hereof.
(i) "Common Stock" means the common stock, $.01 par
value, of the Company.
(j) "Company" means U S Industrial Services, Inc., a
Delaware corporation.
(k) "Consultant" means any person who is engaged by
the Company or any Parent or Subsidiary to render consulting or advisory
services to such entity.
(l) "Director" means a member of the Board of
Directors of the Company.
(m) "Disability" means total and permanent disability
as defined in Section 22(e)(3) of the Code.
(n) "Employee" means any person, including Officers
and Directors, employed by the Company or any Parent or Subsidiary of the
Company. A Service Provider shall not cease to be an Employee in the case of (i)
any leave of absence approved by the Company or (ii) transfers between locations
of the Company or between the Company, its Parent, any Subsidiary, or any
successor. A leave of absence approved by the Company shall include sick leave,
military leave, or any other leave of absence approved by an authorized
representative of the Company. For purposes of Incentive Stock Options, no such
leave may exceed 90 days, unless reemployment upon expiration of such leave is
guaranteed by statute or contract, including Company policies. If reemployment
upon expiration of a leave of absence approved by the Company is not so
guaranteed, on the 181st day of such leave any Incentive Stock Option held by
the Optionee shall cease to be treated as an Incentive Stock Option and shall be
treated for tax purposes as a Nonstatutory Stock Option. Neither service as a
Director nor payment of a director's fee by the Company shall be sufficient to
constitute "employment" by the Company.
(o) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
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(p) "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 Nasdaq National Market or The Nasdaq 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 determination;
or
(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.
(q) "Incentive Stock Option" means an Option intended
to qualify as an incentive stock option within the meaning of Section 422 of the
Code.
(r) "Nonstatutory Stock Option" means an Option not
intended to qualify as an Incentive Stock Option.
(s) "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.
(t) "Option" means a stock option granted pursuant to
the Plan.
(u) "Option Agreement" means a written or electronic
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.
(v) "Option Exchange Program" means a program whereby
outstanding Options are exchanged for Options with a lower exercise price.
(w) "Optioned Stock" means the Common Stock subject
to an Option or a Stock Purchase Right.
(x) "Optionee" means the holder of an outstanding
Option or Stock Purchase Right granted under the Plan.
(y) "Parent" means a "parent corporation," whether
now or hereafter existing, as defined in Section 424(e) of the Code.
(z) "Plan" means this 2001 Stock Plan.
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(aa) "Purchaser" means an individual or entity who
purchases Restricted Stock by exercising a Stock Purchase Right.
(bb) "Restricted Stock" means shares of Common Stock
acquired pursuant to a grant of a Stock Purchase Right under Section 11 below.
(cc) "Service Provider" means an Employee, Director,
or Consultant.
(dd) "Share" means a share of the Common Stock, as
adjusted in accordance with Section 12 below.
(ee) "Stock Purchase Right" means a right to purchase
Common Stock pursuant to Section 11 below.
(ff) "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 below, the maximum aggregate number of Shares which may be subject to
option and sold under the Plan is 2,000,000 Shares. The Shares may be authorized
but unissued, or reacquired Common Stock.
If an Option or Stock Purchase Right expires or
becomes unexercisable without having been exercised in full, is surrendered
pursuant to an Option Exchange Program, or repurchased pursuant to the Company's
right of repurchase, the unpurchased Shares which were subject thereto and the
repurchased shares, as the case may be, shall become available for future grant
or sale under the Plan (unless the Plan has terminated). However, Shares that
have actually been issued under the Plan, upon exercise of either an Option or
Stock Purchase Right, shall not be returned to the Plan and shall not become
available for future distribution under the Plan, except that if Shares of
Restricted Stock are repurchased by the Company at their original purchase
price, such Shares shall become available for future grant under the Plan.
4. Administration of the Plan.
(a) The Plan shall be administered by the Board or a
Committee appointed by the Board, which Committee shall be constituted to comply
with Applicable Laws.
(b) 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 its
discretion:
(i) to determine the Fair Market Value;
(ii) to select the Service Providers to whom
Options and Stock Purchase Rights may from time to time be granted hereunder;
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(iii) to determine the number of Shares to be
covered by each such award granted hereunder;
(iv) to approve forms of agreement for use under
the Plan;
(v) to determine the terms and conditions, of
any Option or Stock Purchase Right granted hereunder. Such terms and conditions
include, but are not limited to, the exercise price, the time or times when
Options or Stock Purchase Rights may be exercised (which may be based on
performance criteria), any vesting acceleration or waiver of forfeiture
restrictions, and any restriction or limitation regarding any Option or Stock
Purchase Right or the Common Stock relating thereto, based in each case on such
factors as the Administrator, in its sole discretion, shall determine;
(vi) to determine whether and under what
circumstances an Option may be settled in cash under Section 9(e) instead of
Common Stock;
(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 has declined since the date the Option was granted;
(viii) to initiate an Option Exchange Program;
(ix) to prescribe, amend and rescind rules and
regulations relating to the Plan, including rules and regulations relating to
sub-plans established for the purpose of qualifying for preferred tax treatment
under foreign tax laws;
(x) 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 or Stock Purchase Right 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 Optionees
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; and
(xi) to construe and interpret the terms of the
Plan and awards granted pursuant to the Plan.
(c) Effect of Administrator's Decision. All
decisions, determinations and interpretations of the Administrator shall be
final and binding on all Optionees.
5. Eligibility.
(a) Nonstatutory Stock Options and Stock Purchase
Rights may be granted to Service Providers. Incentive Stock Options may be
granted only to Employees.
(b) Each Option shall be designated in the Option
Agreement as either an Incentive Stock Option or a Nonstatutory Stock Option.
However, notwithstanding such designation, to the extent that the aggregate Fair
Market Value of the Shares with respect to
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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 Parent or
Subsidiary) exceeds $100,000, such Options shall be treated as Nonstatutory
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) Neither the Plan nor any Option or Stock Purchase
Right shall confer upon any Optionee any right with respect to continuing the
Optionee's relationship as a Service Provider 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. Subject to Section 18, the Plan shall become
effective upon its adoption by the Board. It shall continue in effect for a term
of 10 years unless sooner terminated under Section 14.
7. Term of Option. The term of each Option shall be stated in
the Option Agreement; provided, however, that the term shall be no more than 10
years from the date of grant thereof. In the case of an Incentive Stock Option
granted to an Optionee who, at the time the Option is granted, owns stock
representing more than 10% of the voting power of all classes of stock of the
Company or any Parent or Subsidiary, the term of the Option shall be five years
from the date of grant or such shorter term as may be provided in the Option
Agreement.
8. Option Exercise Price and Consideration.
(a) The per share exercise price for the Shares to be
issued upon exercise of an Option shall be such price as is determined by the
Administrator, but shall be subject to the following:
(i) In the case of an Incentive Stock Option
(1) granted to an Employee who, at the time
of grant of such Option, owns stock representing more than 10% of the voting
power of all classes of stock of the Company or any Parent or Subsidiary, the
exercise price shall be no less than 110% of the Fair Market Value per Share on
the date of grant.
(2) 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
granted to any Service Provider, 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.
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(b) 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 Incentive Stock Option,
shall be determined at the time of grant). Such consideration may consist of (1)
cash, (2) check, (3) promissory note, (4) other Shares which (x) 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 (y) have a Fair Market Value
on the date of surrender equal to the aggregate exercise price of the Shares as
to which such Option shall be exercised, (5) consideration received by the
Company under a cashless exercise program implemented by the Company in
connection with the Plan, or (6) any combination of the foregoing methods of
payment. 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.
9. Exercise of Option.
(a) Procedure for Exercise; Rights as a Stockholder.
Any Option granted hereunder shall be exercisable according to the terms hereof
at such times and under such conditions as determined by the Administrator and
set forth in the Option Agreement. Unless the Administrator provides otherwise,
vesting of Options granted hereunder shall be tolled during any unpaid leave of
absence. An Option may not be exercised for a fraction of a Share.
An Option shall be deemed 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 consist of any consideration and method of payment authorized by the
Administrator and permitted by the Option Agreement and the Plan. The Company
shall issue (or cause to be issued) such Shares promptly after the Option is
exercised. Certificates representing the 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. If an Optionee
elects to conduct a Cashless Exercise, the Company shall cause to be delivered
to such Optionee (and his or her spouse, as the case may be) certificates
representing ownership of a number of shares of Stock equal to (i) the total
number of Shares issued to such Optionee in such Cashless Exercise minus (ii)
the number of shares surrendered in the Cashless Exercise.
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 Shares, notwithstanding
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 Shares are issued, except as
provided in Section 12. 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; provided that, for the purposes of the Plan, Shares
surrendered in a Cashless Exercise shall not decrease the number of Shares
thereafter available for purposes of the Plan.
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(b) Termination of Relationship as a Service
Provider. If an Optionee ceases to be a Service Provider, such Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement (of at least 30 days) 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 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.
In the event an Optionee ceases to be an Employee but
otherwise remains a Service Provider, such Employee's Incentive Stock Option
shall automatically convert to a Nonstatutory Stock Option on the date 91 days
following such change of status.
(c) Disability of Optionee. If an Optionee ceases to
be a Service Provider as a result of the Optionee's Disability, the Optionee may
exercise his or her Option within such period of time as is specified in the
Option Agreement (of at least 180 days) to the extent the Option is vested on
the date of termination (but in no event later than the expiration of the term
of such 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
365 days 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 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 a
Service Provider, the Option may be exercised within such period of time as is
specified in the Option Agreement (of at least 180 days) to the extent that the
Option is vested on the date of death (but in no event later than the expiration
of the term of such Option as set forth in the Option Agreement) by the
Optionee's estate or by a person who acquires the right to exercise the Option
by bequest or inheritance. In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for 365 days following the
Optionee's termination. If, at the time of death, the Optionee is not vested as
to the entire Option, the Shares covered by the unvested portion of the Option
shall immediately revert to the Plan. 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 Plan.
(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 is made.
10. Non-Transferability of Options and Stock Purchase Rights.
Options and Stock Purchase Rights may not be sold, pledged, assigned,
hypothecated, transferred, or disposed
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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.
11. Stock Purchase Rights.
(a) Rights to Purchase. Stock Purchase Rights may be
issued either alone, in addition to, or in tandem with other awards granted
under the Plan and/or cash awards made outside of the Plan. After the
Administrator determines that it will offer Stock Purchase Rights under the
Plan, it shall advise the offeree in writing or electronically of the terms,
conditions and restrictions related to the offer, including the number of Shares
that such person shall be entitled to purchase, the price to be paid, and the
time within which such person must accept such offer. The offer shall be
accepted by execution of a Restricted Stock Purchase Agreement in the form
determined by the Administrator.
(b) Repurchase Option. Except as set forth in the
Restricted Stock Purchase Agreement or unless the Administrator determines
otherwise, the Restricted Stock Purchase Agreement shall grant the Company a
repurchase option exercisable upon the voluntary or involuntary termination of
the Purchaser's service with the Company for any reason (including death or
Disability). The purchase price for Shares repurchased pursuant to the
Restricted Stock Purchase Agreement shall be the original price paid by the
Purchaser and may be paid by cancellation of any indebtedness of the Purchaser
to the Company. The repurchase option shall lapse as set forth in the Restricted
Stock Purchase Agreement or if not set forth therein then at such rate as the
Administrator may determine.
(c) Other Provisions. The Restricted Stock Purchase
Agreement shall contain such other terms, provisions and conditions not
inconsistent with the Plan as may be determined by the Administrator in its sole
discretion.
(d) Rights as a Stockholder. Once the Stock Purchase
Right is exercised, the Purchaser shall have rights equivalent to those of a
stockholder and shall be a stockholder when his or her purchase is entered upon
the records of the duly authorized transfer agent of the Company. No adjustment
shall be made for a dividend or other right for which the record date is prior
to the date the Stock Purchase Right is exercised, except as provided in Section
12 of the Plan.
12. Adjustments Upon Changes in Capitalization, Merger or
Asset Sale.
(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 or Stock Purchase Right, and the
number of shares of Common Stock which have been authorized for issuance under
the Plan, but as to which no Options or Stock Purchase Rights have yet been
granted, or which have been returned to the Plan upon cancellation or expiration
of an Option or Stock Purchase Right, as well as the price per share of Common
Stock covered by each such outstanding Option or Stock Purchase Right, 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
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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." 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 or price of shares of Common Stock subject to an Option
or Stock Purchase Right.
(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 transaction. The Administrator in its discretion may provide for an
Optionee to have the right to exercise his or her Option or Stock Purchase Right
until 15 days prior to such transaction as to all of the Optioned Stock covered
thereby, including Shares as to which the Option or Stock Purchase Right would
not otherwise be exercisable. In addition, the Administrator may provide that
any Company repurchase option applicable to any Shares purchased upon exercise
of an Option or Stock Purchase Right shall lapse as to all such Shares, provided
the proposed dissolution or liquidation takes place at the time and in the
manner contemplated. To the extent it has not been previously exercised, an
Option or Stock Purchase Right will terminate immediately prior to the
consummation of such proposed action.
(c) Merger or Asset Sale.
(iv) In the event of (i) a merger of the Company
with or into another entity or (ii) the sale of all or substantially all of the
assets of the Company (either, a "Merger Transaction"), each outstanding Option
and Stock Purchase Right shall be assumed or an equivalent option or right
substituted by the successor entity or a Parent or Subsidiary of the successor
entity. In the event that the successor entity refuses to assume or substitute
for the Option or Stock Purchase Right, the Optionee shall fully vest in and
have the right to exercise the Option or Stock Purchase Right as to all of the
Optioned Stock, including Shares as to which it would not otherwise be vested or
exercisable. If an Option or Stock Purchase Right becomes fully vested and
exercisable in lieu of assumption or substitution in the event of a Merger
Transaction, the Administrator shall notify the Optionee in writing or
electronically that the Option or Stock Purchase Right shall be fully
exercisable for a period of 15 days from the date of such notice, and the Option
or Stock Purchase Right shall terminate upon the expiration of such period. For
the purposes of this paragraph, the Option or Stock Purchase Right shall be
considered assumed if, following the Merger Transaction, the option or right
confers the right to purchase or receive, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right immediately prior to the Merger
Transaction, the consideration (whether stock, cash, or other securities or
property) received in the Merger Transaction by holders of Common Stock for each
Share held on the effective date of the Merger 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 Transaction is not solely common stock
of the successor entity or its Parent, the Administrator may, with the consent
of the successor entity, provide for the consideration to be received upon the
exercise of the Option or Stock Purchase Right, for each Share of Optioned Stock
subject to the Option or Stock Purchase Right, to be solely common stock of the
successor entity or its
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Parent equal in fair market value to the per share consideration received by
holders of Common Stock in the Merger Transaction.
(d) Vesting Acceleration. In the event of an
assumption or substitution in connection with a Merger Transaction that
constitutes a Change of Control, the Administrator shall use his discretion in
causing all, some, or none of each Optionee's rights to purchase Optioned Stock
to become automatically vested on an accelerated basis and be fully exercisable
as of the date immediately preceding any such Change in Control. Notwithstanding
anything to the contrary herein, if the Optionee's employment with the Company
is terminated or his or her job duties or position is adversely changed within
six months of the closing of such Change in Control, all Options held by such
employee shall immediately vest on the date of termination or change in job
duties or position and any Company repurchase rights to Shares shall lapse.
13. Time of Granting Options and Stock Purchase Rights. The
date of grant of an Option or Stock Purchase Right shall, for all purposes, be
the date on which the Administrator makes the determination granting such Option
or Stock Purchase Right, or such other date as is determined by the
Administrator. Notice of the determination shall be given to each Employee or
Consultant to whom an Option or Stock Purchase Right 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 may at any
time amend, alter, suspend or terminate the Plan.
(b) Stockholder Approval. The Board shall obtain
stockholder approval of any Plan amendment to the extent necessary and desirable
to comply with Applicable Laws.
(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 shall comply with Applicable Laws and 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 Administrator may require the person exercising such
Option to represent and warrant 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 if, in the opinion of counsel for the Company,
such a representation is required.
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16. 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.
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. Stockholder Approval. The Plan shall be subject to
approval by the stockholders of the Company within 12 months after the date the
Plan is adopted. Such stockholder approval shall be obtained in the degree and
manner required under Applicable Laws.
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