EXHIBIT 99
ADDITIONAL EXHIBITS
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(1) LITIGATION ECONMICS, INC.
1996 STOCK OPTION PLAN
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(2) FUND IMPOUND AGREEMENT
Litigation Economics, Inc.
Section 1. Purpose; Definitions.
1.1 Purpose. The purpose of Litigation Economics, Inc. (the
"Company") 1996 Option Plan (the "Plan") is to enable the Company to offer
to its key employees, officers, directors, consultants and sales
representatives whose past, present and/or potential contributions to the
Company and its Subsidiaries have been, are or will be important to the
success of the Company, an opportunity to acquire a proprietary interest
in the Company. The various types of long-term incentive awards which may
be provided under the Plan will enable the Company to respond to changes
in compensation practices, tax laws, accounting regulations and the size
and diversity of its business.
1.2 Definitions. For purposes of the Plan, the following terms
shall be defined as set forth below:
(a) "Agreement" means the agreement between the Company and
the Holder setting forth the terms and conditions of an award under the
Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor thereto and the regulations
promulgated thereunder.
(d) "Committee" means the Stock Option Committee of the
Board or any other committee of the Board, which the Board may designate
to administer the Plan or any portion thereof. If no Committee is so
designated, then all references in this Plan to "Committee" shall mean the
Board.
(e) "Common Stock" means the Common Stock of the Company,
par value $.001 per share.
(f) "Company" means Litigation Economics, Inc., a
corporation organized under the laws of the State of Nevada.
(g) "Deferred Stock" means Stock to be received, under an
award made pursuant to Section 9, below, at the end of a specified
deferral period.
(h) "Disability" means disability as determined under
procedures established by the Committee for purposes of the Plan.
(i) "Effective Date" means the date set forth in Section
13.1, below.
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(j) "Fair Market Value", unless otherwise required by any
applicable provision of the Code or any regulations issued thereunder,
means, as of any given date: (i) if the Common Stock is listed on a
national securities exchange or quoted on the Nasdaq National Market or
Nasdaq SmallCap Market, the last sale price of the Common Stock in the
principal trading market for the Common Stock on the last trading day
preceding the date of grant of an award hereunder, as reported by the
exchange or Nasdaq, as the case may be; (ii) if the Common Stock is not
listed on a national securities exchange or quoted on the Nasdaq National
Market or Nasdaq SmallCap Market, but is traded in the over-the-counter
market, the closing bid price for the Common Stock on the last trading day
preceding the date of grant of an award hereunder for which such
quotations are reported by the OTC Bulletin Board or the National
Quotation Bureau, Incorporated or similar publisher of such quotations;
and (iii) if the fair market value of the Common Stock cannot be
determined pursuant to clause (i) or (ii) above, such price as the
Committee shall determine, in good faith.
(k) "Holder" means a person who has received an award under
the Plan.
(l) "Incentive Stock Option" means any Stock Option intended
to be and designated as an "incentive stock option" within the meaning of
Section 422 of the Code.
(m) "Nonqualified Stock Option" means any Stock Option that
is not an Incentive Stock Option.
(n) "Normal Retirement" means retirement from active
employment with the Company or any Subsidiary on or after age 65.
(o) "Other Stock-Based Award" means an award under Section
10, below, that is valued in whole or in part be reference to, or is
otherwise based upon, Stock.
(p) "Parent" means any present or future parent corporation
of the Company, as such term is defined in Section 424(e) of the Code.
(q) "Plan" means Litigation Economics, Inc. 1996 Stock
Option Plan, as hereinafter amended from time to time.
(r) "Restricted Stock"means Stock, received under an award
made pursuant to Section 8, below, that is subject to restrictions under
said Section 8.
(s) "SAR Value" means the excess of the Fair Market Value
(on the exercise date) of the number of shares for which the Stock
Appreciation Right is exercised over the exercise price that the
participant would have otherwise had to pay to exercise the related Stock
Option and purchase the relevant shares.
(t) "Stock" means the Common Stock of the Company, par value
$.001 per share.
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(u) "Stock Appreciation Right" means the right to receive
from the Company, on surrender of all or part of the related Stock Option,
without a cash payment to the Company, a number of shares of Common Stock
equal to the SAR Value divided by the exercise price of the Stock Option.
(v) "Stock Option" or "Option" means any option to purchase
shares of Stock which is granted pursuant to the Plan.
(w) "Stock Reload Option" means any option granted under
Section 6.3, below, as a result of the payment of the exercise price of a
Stock Option and/or the withholding tax related thereto in the form of
Stock owned by the Holder or the withholding of Stock by the Company.
(x) "Subsidiary" means any present or future subsidiary
corporation of the Company, as such term is defined in Section 424(f) of
the Code.
Section 2. Administration.
2.1 Committee Membership. The Plan shall be administered by the
Board or a Committee. Committee members shall serve for such terms as the
Board may in each case determine, and shall be subject to removal at any
time by the Board.
2.2 Powers of Committee. The Committee shall have full authority,
subject to Section 4, below, to award, pursuant to the terms of the Plan:
(i) Stock Options, (ii) Stock Appreciation Rights, (iii) Restricted Stock,
(iv) Deferred Stock, (v) Stock Reload Options and/or (vi) Other Stock-Based
Awards. For purposes of illustration and not of limitation, the
Committee shall have the authority (subject to the express provisions of
this Plan):
(a) to select the officers, key employees, directors,
consultants and sales representatives of the Company or any Subsidiary to
whom Stock Options, Stock Appreciation Rights, Restricted Stock, Deferred
Stock, Reload Stock Options and/or Other Stock-Based Awards may from time
to time be awarded hereunder.
(b) to determine the terms and conditions, not inconsistent
with the terms of the Plan, of any award granted hereunder (including, but
not limited to, number of shares, share price, any restrictions or
limitations, and any vesting, exchange, surrender, cancellation,
acceleration, termination, exercise or forfeiture provisions, as the
Committee shall determine);
(c) to determine any specified performance goals or such
other factors or criteria which need to be attained for the vesting of an
award granted hereunder;
(d) to determine the terms and conditions under which awards
granted hereunder are to operate on a tandem basis and/or in conjunction
with or apart from other equity awarded under this Plan and cash awards
made by the Company or any Subsidiary outside of this Plan;
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(e) to permit a Holder to elect to defer a payment under the
Plan under such rules and procedures as the Committee may establish,
including the crediting of interest on deferred amounts denominated is
cash and of dividend equivalents on deferred amounts denominated in Stock;
(f) to determine the extent and circumstances under which
Stock and other amounts payable with respect to an award hereunder shall
be deferred which may be either automatic or at the election of the
Holder; and
(g) to substitute (i) new Stock Options for previously
granted Stock Options, which previously granted Stock Options have higher
option exercise prices and/or contain other less favorable terms, and (ii)
new awards of any other type for previously granted awards of the same
type, which previously granted awards are upon less favorable terms.
2.3 Interpretation of Plan.
(a) Committee Authority. Subject to Section 4 and 12,
below, the Committee shall have the authority to adopt, alter and repeal
such administrative rules, guidelines and practices governing the Plan as
it shall, from time to time, deem advisable, to interpret the terms and
provisions of the Plan and any award issued under the Plan (and to
determine the form and substance of all Agreements relating thereto), to
the otherwise supervise the administration of the Plan. Subject to
Section 12, below, all decisions made by the Committee pursuant to the
provisions of the Plan shall be made in the Committee's sole discretion
and shall be final and binding upon all persons, including the Company,
its Subsidiaries and Holders.
(b) Incentive Stock Options. Anything in the Plan to the
contrary notwithstanding, no term or provision of the Plan relating to
Incentive Stock Options (including but limited to Stock Reload Options or
Stock Appreciation rights granted in conjunction with an Incentive Stock
Option) or any Agreement providing for Incentive Stock Options shall be
interpreted, amended or altered, nor shall any discretion or authority
granted under the Plan be so exercised, so as to disqualify the Plan under
Section 422 of the Code, or, without the consent of the Holder(s)
affected, to disqualify any Incentive Stock Option under such Section 422.
Section 3. Stock Subject to Plan.
3.1 Number of Shares. The total number of share of Common Stock
reserved and available for distribution under the Plan shall be 400,000
shares. Share of Stock under the Plan may consist, in whole or in part,
of authorized and unissued shares or treasury shares. If any shares of
Stock that have been granted pursuant to a Stock Option cease to be
subject to a Stock Option, or if any shares of Stock that are subject to
any Stock Appreciation Right, Restricted Stock, Deferred Stock award,
Reload Stock Option or Other Stock-Based Award granted hereunder are
forfeited or any such award otherwise terminates without a payment being
made to the Holder in the form of Stock, such shares shall again be
available for distribution in connection with future grants and awards
under the Plan. Only net shares issued upon a stock-for-stock exercise
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(including stock used for withholding taxes) shall be counted against the
number of shares available under the Plan.
3.2 Adjustment Upon Changes in Capitalization, Etc. In the event
of any merger, reorganization, consolidation, recapitalization, dividend
(other than a cash dividend), stock split, reverse stock split, or other
change in corporate structure affecting the Stock, such substitution or
adjustment shall be made in the aggregate number of shares reserved for
issuance under the Plan, in the number and exercise price of shares
subject to outstanding Options, in the number of shares and Stock
Appreciation Right price relating to Stock Appreciation Rights, and in the
number of shares and Stock Appreciation Right price relating to Stock
Appreciation Rights, and in the number of shares subject to, and in the
related terms of, other outstanding awards (including but not limited to
awards of Restricted Stock, Deferred Stock, Reload Stock Options and Other
Stock-Based Awards) granted under the Plan as may be determined to be
appropriate by the Committee in order to prevent dilution or enlargement
of rights, provided that the number of shares subject to any award shall
always be a whole number.
Section 4. Eligibility.
Awards may be made or granted to key employees, officers, directors,
consultants and sales representatives who are deemed to have rendered or
to be able to render significant services to the Company or its
Subsidiaries and who are deemed to have contributed or to have the
potential to contribute to the success of the Company. No Incentive Stock
Option shall be granted to any person who is not an employee of the
Company or a Subsidiary at the time of grant.
Section 5. Required Six-Month Holding Period.
Any equity security issued under this Plan may not be sold prior to
six months from the date of the grant of the related award without the
approval of the Company.
Section 6. Stock Options.
6.1 Grant and Exercise. Stock Options granted under the Plan may
be of two types: (i) Incentive Stock Options and (ii) Nonqualified Stock
Options. Any Stock Option granted under the Plan shall contain such
terms, not inconsistent with this Plan, or with respect to Incentive Stock
Options, not inconsistent with the Code, as the Committee may from time to
time approve. The Committee shall have the authority to grant Incentive
Stock Options, Non-Qualified Stock Options, or both types of Stock Options
and which may be granted alone or in addition to other awards granted
under the Plan. To the extent that any Stock Option intended to qualify
as an Incentive Stock Option does not so qualify, it shall constitute a
separate Nonqualified Stock Option. An Incentive Stock Option may be
granted only within the ten-year period commencing from the Effective Date
and may only be exercised within ten years of the date of grant or five
years in the case of an Incentive Stock Option granted to an optionee
("10% Stockholder") who, at the time of grant, owns Stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company.
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6.2 Terms and Conditions. Stock Options granted under the Plan
shall be subject to the following terms and conditions:
(a) Exercise Price. The exercise price per share of Stock
purchasable under a Stock Option shall be determined by the Committee at
the time of grant and may not be less than 100% of the Fair Market Value
of the Stock as defined above; provided, however, that the exercise price
of an Incentive Stock Option granted to a 10% Stockholder shall not be
less than 110% of the Fair Market Value of the Stock.
(b) Option Term. Subject to the limitations in Section 6.1,
above, the term of each Stock Option shall be fixed by the Committee.
(c) Exercisability. Stock Options shall be exercisable at
such time or times and subject to such terms and conditions as shall be
determined by the Committee and as set forth in Section 11, below. If the
Committee provides, in its discretion, that nay Stock Option is
exercisable only in installments, i.e., that it vests over time, the
Committee may waive such installment exercise provisions at any time at or
after the time of grant in whole or in part, based upon such factors as
the Committee shall determine.
(d) Method of Exercise. Subject to whatever installment,
exercise and waiting period provisions are applicable in a particular
case, Stock Options may be exercised in whole or in part at any time
during the term of the Option, by giving written notice of exercise to the
Company specifying the number of shares of Stock to be purchase. Such
notice shall be accompanied by payment in full of the purchase price,
which shall be in cash or , unless otherwise provided in the Agreement, in
shares of Stock (including Restricted Stock and other contingent awards
under this Plan) or, partly in cash and partly in such Stock, or such
other means which the Committee determines are consistent with the Plan's
purpose and applicable law. Cash payments shall be made by wire transfer,
certified or bank check or personal check, in each case payable to the
order of the Company; provided, however, that the Company shall not be
required to deliver certificates for shares of Stock with respect to which
an Option is exercised until the Company has confirmed the receipt of good
and available funds in payment of the purchase price thereof. Payments in
the form of Stock shall be valued at the Fair Market Value of a share of
Stock on the date prior to the date of exercise. Such payments shall be
made by delivery of stock certificates in negotiable form which are
effective to transfer good and valid title thereto to the Company, free of
any liens or encumbrances. Subject to the terms of the Agreement, the
Committee may, in its sole discretion, at the request of the Holder,
deliver upon the exercise of a Nonqualified Stock Option a combination of
shares of Deferred Stock and Common Stock; provided that, notwithstanding
the provision of Section 9 of the Plan, such Deferred Stock shall be fully
vested and not subject to forfeiture. A Holder shall have none of the
rights of a stockholder with respect to the shares subject to the Option
until such shares shall be transferred to the Holder upon the exercise of
the Option.
(e) Transferability. No Stock Option shall be transferable
by the Holder other than by will or by the laws of descent and
distribution, and all Stock Options shall be exercisable, during the
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Xxxxxx's lifetime, only by the Holder.
(f) Termination by Reason of Death. If a Holders'
employment by the Company or a Subsidiary terminates by reason of death,
any Stock Option held by such Holder, unless otherwise determined by the
Committee at the time of grant and set forth in the Agreement, shall be
fully vested and may thereafter be exercised by the legal representative
of the estate or by the legatee of the Holder under the will of the
Holder, for a period of one year (or such other greater or lesser period
as the Committee may specify at grant) from the date of such death or
until the expiration of the stated term of such Stock Option, which ever
period is the shorter.
(g) Termination by Reason of Disability. If a Holder's
employment by the Company or any Subsidiary terminates by reason of
Disability, any Stock Option held by such Holder, unless otherwise
determined by the Committee at the time of grant and set forth in the
Agreement, shall be fully vested and may thereafter be exercised by the
Holder for a period of one year (or such other greater or lesser period as
the Committee may specify at the time of grant) from the date of such
termination of employment or until the expiration of the stated term of
such Stock Option, whichever period is the shorter.
(h) Other Termination. Subject to the provisions of Section
14.3, below, and unless otherwise determined by the Committee at the time
of grant and set forth in the Agreement, if a Holder is an employee of the
Company or a Subsidiary at the time of grant and if such Xxxxxx's
employment by the Company or any Subsidiary terminates for any reason
other than death or Disability, the Stock Option shall thereupon
automatically terminate, except that if the Holder's employment is
terminated by the Company or a Subsidiary without cause or due to Normal
Retirement, then the portion of such Stock Option which has vested on the
date of termination of employment may be exercised for the lesser of three
months after termination of employment or the balance of such Stock
Option's term.
(i) Additional Incentive Stock Option Limitation. In the
case of an Incentive Stock Option, the aggregate Fair Market Value of
Stick (determined at the time of grant of the Option) with respect to
which Incentive Stock Options become exercisable by a Holder during any
calendar year (under all such plans of the Company and its Parent and
Subsidiary) shall not exceed $100,000.
(j) Buyout and Settlement Provisions. The Committee may at
any time, in its sole discretion, offer to buy out a Stock Option
previously granted, based upon such terms and conditions as the Committee
shall establish and communicate to the Holder at the time that such offer
is made.
(k) Stock Option Agreement. Each grant of a Stock Option
shall be confirmed by and shall be subject to the terms of, the Agreement
executed by the Company and the Holder.
6.3 Stock Reload Option. The Committee may also grant to the
Holder (concurrently with the grant of an Incentive Stock Option and at or
after the time of grant in the case of a Nonqualified Stock Option) a
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Stock Reload Option up to the amount of shares of Stock held by the Holder
for at least six months and used to pay all or part of the exercise price
of an Option and, if any, withheld by the Company as payment for
withholding taxes. Such Stock Reload Option shall have an exercise price
equal to the Fair Market Value as of the date of the Stock Reload Option
grant. Unless the Committee determines otherwise, a Stock Reload Option
may be exercised commencing one year after it is granted and shall expire
on the date of expiration of the Option to which the Reload Option is
related.
Section 7. Stock Appreciation Rights.
7.1 Grant and Exercise. The Committee may grant Stock
Appreciation Rights to participants who have been, or are being granted,
Options under the Plan as a means of allowing such participants to
exercise their Options without the need to pay the exercise price in cash.
In the case of a Nonqualified Stock Option, a Stock Appreciation Right may
be granted either at or after the time of the grant of such Nonqualified
Stock Option. In the case of an Incentive Stock Option, a Stock
Appreciation Right may be granted only at the time of the grant of such
Incentive Stock Option.
7.2 Terms and Conditions. Stock Appreciation Rights shall be
subject to the following terms and conditions:
(a) Exercisability. Stock Appreciation Rights shall be
exercisable as determined by the Committee and set forth in the Agreement,
subject to the limitations, if any, imposed by the Code, with respect to
related Incentive Stock Options.
(b) Termination. A Stock Appreciation Right shall terminate
and shall no longer be exercisable upon the termination or exercise of the
related Stock Option.
(c) Method of Exercise. Stock Appreciation Rights shall be
exercisable upon such terms and conditions as shall be determined by the
Committee and set forth in the Agreement and by surrendering the
applicable portion of the related Stock Option. Upon such exercise and
surrender, the Holder shall be entitled to receive a number of Option
Shares equal to the SAR Value divided by the exercise price of the Option.
(d) Shares Affected Upon Plan. The granting of a Stock
Appreciation Rights shall not affect the number of shares of Stock
available under for awards under the Plan. The number of shares available
for awards under the Plan will, however, be reduced by the number of
shares of Stock acquirable upon exercise of the Stock Option to which such
Stock Appreciation right relates.
Section 8. Restricted Stock.
8.1 Grant. Shares of Restricted Stock may be awarded either alone
or in addition to other awards granted under the Plan. The Committee
shall determine the eligible persons to whom, and the time or times at
which, grants of Restricted Stock will be awarded, the number of shares to
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be awarded, the price (if any) to be paid by the Holder, the time or times
within which such awards may be subject to forfeiture (the "Restriction
Period"), the vesting schedule and rights to acceleration thereof, and all
other terms and conditions of the awards.
8.2 Terms and Conditions. Each Restricted Stock award shall be
subject to the following terms and conditions:
(a) Certificates. Restricted Stock, when issued, will be
represented by a stock certificate or certificates registered in the name
of the Holder to whom such Restricted Stock shall have been awarded.
During the Restriction Period, certificates representing the Restricted
Stock and any securities constituting Retained Distributions (as defined
below) shall bear a legend to the effect that ownership of the Restricted
Stock (and such Retained Distributions), and the enjoyment of all rights
appurtenant thereto, are subject to the restrictions, terms and conditions
provided in the Plan and the Agreement. Such certificates shall be
deposited by the Holder with the Company, together with stock powers or
other instruments of assignment, each endorsed in blank, which will permit
transfer to the Company of all or any portion of the Restricted Stock and
any securities constituting Retained Distributions that shall be forfeited
or that shall not become vested in accordance with the Plan and the
Agreement.
(b) Rights of Holder. Restricted Stock shall constitute
issued and outstanding shares of Common Stock for all corporate purposes.
The Holder will have the right to vote such Restricted Stock, to receive
and retain all regular cash dividends and other cash equivalent
distributions as the Board may in its sole discretion designate, pay or
distribute on such Restricted Stock and to exercise all other rights,
powers and privileges of a holder of Common Stock with respect to such
Restricted Stock, with the exceptions that (i) the Holder will not be
entitled to delivery of the stock certificate or certificates representing
such Restricted Stock until the Restriction Period shall have expired and
unless all other vest requirements with respect thereto shall have been
fulfilled; (ii) the Company will retain custody of the stock certificate
or certificates representing the Restricted Stock during the Restriction
Period; (iii) other than regular cash dividends and other cash equivalent
distributions as the Board may in its sole discretion designate, pay or
distribute, the Company will retain custody of all distributions
("Retained Distributions") made or declared with respect to the Restricted
Stock (and such Retained Distributions will be subject to the same
restrictions, terms and conditions as are applicable to the restricted
Stock) until such time, if ever, as the Restricted Stock with respect to
which such Retained Distributions shall have been made, paid or declared
shall have become vested and with respect to which the Restriction Period
shall have expired; (iv) a breach of any of the restrictions, terms or
conditions contained in this Plan or the Agreement or otherwise
established by the Committee with respect to any Restricted Stock or
Retained Distributions will cause a forfeiture of such Restricted Stock
and any Retained Distributions with respect thereto.
(c) Vesting; Forfeiture. Upon the expiration of the
Restriction Period with respect to each award of Restricted Stock and the
satisfaction of any other applicable restrictions, terms and conditions
(i) all or part of such Restricted Stock shall become vested in accordance
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with the terms of the Agreement, subject to Section 11, below, and (ii)
any Retained Distributions with respect to such Restricted Stock shall
become vested to the extent that the Restricted Stock related thereto
shall have become vested, subject to Section 11, below. Any such
Restricted Stock and Retained Distributions that do not vest shall be
forfeited to the Company and the Holder shall not thereafter have any
rights with respect to such Restricted Stock and Retained Distributions
that shall have been so forfeited.
Section 9. Deferred Stock.
9.1 Grant. Shares of Deferred Stock may be awarded either alone
or in addition to other awards granted under the Plan. The Committee
shall determine the eligible persons to whom and the time or times at
which grants of Deferred Stock shall be awarded, the number of shares of
Deferred Stock to be awarded to any person, the duration of the period
(the "Deferral Period") during which, and the conditions under which,
receipt of the shares will be deferred, and all the other terms and
conditions of the awards.
9.2 Terms and Conditions. Each Deferred Stock award shall be
subject to the following terms and conditions:
(a) Certificates. At the expiration of the Deferral Period
(or the Additional Deferral Period referred to in Section 9.2 (d) below,
where applicable), shares certificates shall be issued and delivered to
the Holder, or his legal representative, representing the number equal to
the shares covered by the Deferred Stock award.
(b) Rights of Holder. A person entitled to receive Deferred
stock shall not have any rights of a stockholder by virtue of such award
until the expiration of the applicable Deferral Period and the issuance
and delivery of the certificates representing such Stock. The shares of
Stock issuable upon expiration of the Deferral Period shall not be deemed
outstanding by the Company until the expiration of such Deferral period
and the issuance and delivery of such Stock to the Holder.
(c) Vesting; Forfeiture. Upon the expiration of the
Deferral Period with respect to each award of Deferred Stock and the
satisfaction of any other applicable restrictions, terms and conditions
all or part of such Deferred Stock shall become vested in accordance with
the terms of the Agreement, subject to Section 11, below. Any such
Deferred Stock that does not vest shall be forfeited to the Company and
the Holder shall not thereafter have any rights with respect to such
Deferred Stock.
(d) Additional Deferral Period. A Holder may request to,
and the Committee may at any time, defer the receipt of an award (or an
installment of an award) for an additional specified period or until a
specified event (the "Additional Deferral Period"). Subject to any
exceptions adopted by the Committee, such request must generally be made
at least one year prior to expiration of the Deferral Period for such
Deferred Stock award (or such installment).
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Section 10. Other Stock-Based Awards.
10.1 Grant and Exercise. Other Stock-Based Awards may be awarded,
subject to limitations under applicable law, that are denominated or
payable, in value in whole or in part by reference to, or otherwise based
on, or related to, shares of Common Stock, as deemed by the Committee to
be consistent with the purposes of the Plan, including, without
limitation, purchase rights, shares of Common Stock awarded which are not
subject to any restrictions or conditions, convertible or exchangeable
debentures, or other rights convertible into shares of Common Stock and
awards valued by reference to the value of securities of or the
performance of specified subsidiaries. Other Stock-Based Awards may be
awarded either alone or in addition to or in tandem with any other awards
under this Plan or any other plan of the Company.
10.2 Eligibility for Other Stock-Based Awards. The Committee shall
determine the eligible persons to whom and the time or times at which
grants of such other stock-based awards shall be made, the number of
shares of Common Stock to be awarded pursuant to such awards, and all
other terms and conditions of the awards.
10.3 Terms and Conditions. Each Other Stock-Based Award shall be
subject to such terms and conditions as may be determined by the Committee
and to Section 11, below.
Section 11. Accelerated Vesting and Exercisability.
If (i) any person or entity other than the Company and/or any
stockholders of the Company as of the Effective Date acquire securities of
the Company (in one or more transactions) having 25% or more of the total
voting power of all the Company's securities then outstanding and (ii) the
Board of Directors of the Company does not authorize or otherwise approve
such acquisition, then, the vesting periods of any and all Options and
other awards granted and outstanding under the Plan shall be accelerated
and all such Options and awards will immediately and entirely vest, and
the respective holders thereof will have the immediate right to purchase
and/or receive any and all Stock subject to such Options and awards on the
terms set forth in this Plan and the respective agreements respecting such
Options and awards.
Section 12. Amendment and Termination.
Subject to Section 4 hereof, the Board may at any time, and from
time to time, amend alter, suspend or discontinue any of the provisions of
the Plan, but no amendment, alteration, suspension or discontinuance shall
be made which would impair the rights of a Holder under any Agreement
theretofore entered into hereunder, without the Holder's consent.
Section 13. Term of Plan.
13.1 Effective Date. The Plan shall be effective as of the date on
which the Company's stockholders approved the Plan ("Effective Date").
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13.2 Termination Date. Unless terminated by the Board, this Plan
shall continue to remain effective until such time no further awards may
be granted and all awards granted under the Plan are no longer
outstanding. Notwithstanding the foregoing, grants of Incentive Stock
Options may only be made during the ten year period following the
Effective Date.
Section 14. General Provisions.
14.1 Written Agreements. Each award granted under the Plan shall
be confirmed by, and shall be subject to the terms of the Agreement
executed by the Company and the Holder. The Committee may terminate any
award made under the Plan if the Agreement relating thereto is not
executed and returned to the Company within 10 days after the Agreement
has been delivered to the Holder for his or her execution.
14.2 Unfunded Status of Plan. The Plan is intended to constitute
an "unfunded" plan for incentive and deferred compensation. With respect
to any payments not yet made to a Holder by the Company, nothing contained
herein shall give any such Holder any rights that are greater than those
of a general creditor of the Company.
14.3 Employees.
(a) Engaging in Competition With the Company. In the event
aa Holder's employment with the Company or a Subsidiary is terminated for
any reason whatsoever, and within one year after the date thereof such
Holder accepts employment with any competitor of, or otherwise engages in
competition with, the Company, the Committee, in its sole discretion, may
require such Holder to return to the Company the economic value of any
award which was realized or obtained by such Holder at any time during the
period beginning on that date which is six months prior to the date of
such Xxxxxx's termination of employment with the Company.
(b) Termination for Cause. The Committee may, in the event
a Xxxxxx's employment with the company or a Subsidiary is terminated for
cause, annul any award granted under this Plan to return to the Company
the economic value of any award which was realized or obtained by such
Holder at any time during the period beginning on that date which is six
months prior to the date of such Xxxxxx's termination of employment with
the Company.
(c) No Right of Employment. Nothing contained in the Plan
or in any award hereunder shall be deemed to confer upon any Holder who is
an employee of the Company or any Subsidiary any right to continued
employment with the Company or any Subsidiary, nor shall it interfere in
any way with the right of the Company or any Subsidiary to terminate the
employment of any Holder who is an employee at any time.
14.4 Investment Representations. The Committee may require each
person acquiring shares of Stock pursuant to a Stock Option or other award
under the Plan to represent to and agree with the Company in writing that
the Holder is acquiring the shares for investment without a view to
distribution thereof.
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14.5 Additional Incentive Arrangements. Nothing contained in the
Plan shall prevent the Board from adopting such other or additional
incentive arrangements as it may deem desirable, including, but not
limited to, the granting of Stock Options and the awarding of stock and
cash otherwise than under the Plan; and such arrangements may be either
generally applicable or applicable only in specific cases.
14.6 Withholding Taxes. Not later than the date as of which an
amount must first be included in the gross income of the Holder for
Federal income tax purposes with respect to any option or other award
under the Plan, the Holder shall pay to the Company, or made arrangements
satisfactory to the Committee regarding the payment of, any Federal, state
and local taxes of any kind required by law to be withheld or paid with
respect to such amount. If permitted by the Committee, tax withholding or
payment obligations may be settled with Common Stock, including Common
Stock that is part of the award that gives rise to the withholding
requirement. The obligations of the Company under the Plan shall be
conditioned upon such payment or arrangements and the Company or the
Holder's employer (if not the Company) shall, to the extent permitted by
law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Holder from the Company or any Subsidiary.
14.7 Governing Law. The Plan and all awards made and actions taken
thereunder shall be governed by and construed in accordance with the laws
of the State of Nevada (without regard to choice of law provisions).
14.8 Other Benefit Plans. Any award granted under the Plan shall
not be deemed compensation for purposes of computing benefits under any
retirement plan of the Company or any Subsidiary and shall not affect any
benefits under any other benefit plan now or subsequently in effect under
which the availability or amount of benefits is related to the level of
compensation (unless required by specific reference in any such other plan
to awards under this Plan).
14.9 Non-Transferability. Except as otherwise expressly provided
in the Plan, no right or benefit under the Plan may be alienated, sold,
assigned, hypothecated, pledged, exchanged, transferred, encumbranced or
charged, and any attempt to alienate, sell, assign, hypothecate, pledge,
exchange, transfer, encumber or charge the same shall be void.
14.10 Applicable Laws. The obligations of the Company with respect
to all Stock Options and awards under the Plan shall be subject to (i) all
applicable laws, rules and regulations and such approvals by any
governmental agencies as may be required, including, without limitation,
the Securities Act of 1933, as amended, and (ii) the rules and regulations
of any securities exchange on which the Stock may be listed.
14.11 Conflicts. If any of the terms or provisions of the Plan or
an Agreement (with respect to Incentive Stock Options) conflict with the
requirements of Section 422 of the Code, then such terms or provisions
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shall be deemed inoperative to the extent they so conflict with the
requirements of said Section 422 of the Code. Additionally, if this Plan
or any Agreement does not contain any provision required to be included
herein under Section 422 of the Code, such provision shall be deemed to be
incorporated herein and therein with the same force and effect as if such
provision had been set out at length herein and therein. If any of the
terms or provision of any Agreement conflict with any terms or provision
of the Plan, then such terms or provision shall be deemed inoperative to
the extent they so conflict with the requirements of the Plan.
Additionally, if any Agreement does not contain any provision required to
be included therein under the Plan, such provision shall be deemed to be
incorporated therein with the same force and effect as if such provision
had been set out at length therein.
14.12 Non-Registered Stock. The shares of Stock to be distributed
under this Plan have not been, as of the Effective Date, registered under
the Securities Act of 1933, as amended, or any applicable state or foreign
securities laws and the Company has no obligation to any Holder to
register the Stock or to assist the Holder in obtaining an exemption from
the various registration requirements, or to list the Stock on a national
securities exchange.
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WRITTEN CONSENT OF SHAREHOLDERS
LITIGATION ECONOMICS, INC.
The undersigned, being the shareholders of Litigation Economics,
Inc., a Nevada corporation, hereby approve and consent in writing,
pursuant to provisions of Nevada corporate law which permit majority
shareholder approval of action by written consent without a meeting, to
the adoption of the Litigation Economics, Inc. 1996 Stock Option Plan, in
the form attached hereto.
Dated this ________ day of October, 1996
Name of Shareholder: Signature:
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
_______________________________________
-15-
FUND IMPOUND AGREEMENT
NAME OF ISSUER: Litigation Economics, Inc.
ESCROW NUMBER: 61 DATE FILED: 10/14/96
EXPIRATION DATE:--------- OTHER -----------
THE OFFICERS AND DIRECTORS OF Litigation Economics, Inc. XXXXXX AGREE TO
DELIVER, BY XXXX OF THE BUSINESS DAY AFTER RECEIPT, and with names and
addresses of investors at time deposit is made, funds to be applied
to an escrow account in the amount of:
TO: PROFESSIONAL ESCROW SERVICES, INC. $50,000
------------------------------------- ----------
Bank Name Amount
920 XXXX DR. SUITE B, P.O. BOX 2466 POCATELLO, ID 83206
---------------------------------------------------------------
Address City & State Zip Code
As escrow agent, the papers, money, or property hereinafter described,
to be held and disposed of by said escrow agent in accordance with the
duties, instructions, and upon the terms and conditions hereinafter set
forth to which the undersigned hereby agree:
1. Above named bank (hereinafter called the "Bank") is not a party to,
or bound by any agreement which may be evidenced by or arises out of
the following instructions.
2. The Bank and its officers, agents, and employees, act hereunder as
a depository only, and are not responsible or liable in any manner
whatever for serving as escrow agent in this matter or for the
sufficiency, correctness, genuineness or validity of any instrument
deposited with it hereunder, or with respect to the form or execution
of the same, or the identity, authority, or rights of any person
executing or depositing the same.
3. The Bank shall not be required to take or be bound by notice of
any default by any person, or to take any action with respect to such
default involving any expense or liability, unless notified in writing
is given an officer of the Bank of such default by the undersigned or
any of them, and unless it is indemnified in a manner satisfactory to
it against any such expense or liability.
4. The Bank shall be protected in acting upon any notice, request,
waiver, consent, receipt or other paper or document believed by the
Bank to be genuine and to be signed by the proper party or parties.
5. The Bank shall not be liable for any error in judgment or for any
act done or step taken or omitted by it in good faith or for any mistake
or fact or law, or for anything which it may do or refrain from doing
in connection herewith, except its own willful misconduct.
6. The Bank shall not be answerable for the default or misconduct of
any agent, attorney, or employee acting on behalf of the Issuer.
7. In the event of any disagreement between the undersigned(s) or any
of them, and/or the person or persons named in the foregoing
instructions, and/or any other person, resulting in adverse claims
and demands being made in connection with or for any papers, money or
property involved herein or affected hereby, the Bank shall be
entitled at its option to refuse to comply with any such claim or
demand, so long as such disagreement shall continue, and in so refusing
the Bank may make no delivery or other disposition of any money, papers
or property involved herein or affected hereby and in so doing the Bank shall
not be or become liable to the undersigned or any of them or to any
person named in the foregoing instructions for its failure or refusal
to comply with such conflicting or adverse demands; and the Bank shall
be entitled to continue so to refrain and refuse so to act until:
a. The rights of the adverse claimants have been finally adjudicated in
the court assuming and having jurisdiction of the parties and the money,
papers and property involved herein or affected hereby; an/or
b. All differences shall have been adjusted by agreement and the Bank
shall have been notified thereof in writing signed by all of the
interested parties.
8. The papers, documents, money or property subject to this escrow (if
other than already named) are as follows:
Including such items as may be described on attached schedules.
9. The other duties of the Bank under the terms of this agreement
are as follows:
10. The Bank will be named as depository only and has not passed in
any way upon the merits or qualifications of the security and makes no
recommendation with regard to its purchase. The Bank does not authorize
the use of its name by any person for the promotion or sale of the security.
11. Special requirements:
12. Fees for the usual services of the Bank under terms of this agreement
are set forth below. All such fees shall be computed on a fiscal or
calendar year period adjusted for any fractional part thereof except
that a fee for any period shall not be less than the minimum fee indicated.
a. In the event the fees charged and due the Bank remain unpaid for a
period of one year, the bank shall have the right, and is hereby
authorized in its role and absolute discretion to discontinue the escrow,
terminate all duties hereunder, close all accounting or other records,
and to destroy all documents, records and files or to retain such items
in a dormant account status subject to the escheat laws of the State
of Idaho.
b. All fees charged shall be paid as follows: -----------------------
c. The initial escrow fee shall be $70.00
d. The minimum escrow fee shall be $4.00 PER DEPOSIT
e. For fee for any check issued in refunding to subscribers see (13b).
f. In addition to the escrow fee paid or agreed upon at the inception of
this escrow, the parties agree to pay a reasonable compensation for any
extra services rendered or incurred by the Bank including a reasonable
attorney's fee if disputes arise or litigation is threatened or
commences which requires the Bank top refer such dispute to its attorneys.
13. If a minimum of $50,000 is not deposited with the Bank by the date
nine months after the effective date of the Offering or within an
additional period of sixty days if extended by the Company.
a. Issuer shall request termination of escrow and the Bank shall refund
to investors the full amount of investment.
b. Issuer agrees to pay a fee of $4.00 per check for this service if
returned to investors or $36.00 for one check made to litigation
economics, inc.
14. When 100% or more has been deposited with the escrow agent, and all
escrow requirements have been met, the issuer shall request a release
from the Bank setting forth how funds are to be released pursuant to the
terms of the Offering.
15. After release of escrow, the duties, responsibilities and liability
of every kind and character under the escrow agreement shall cease and
terminate.
Signed (Issuer) Litigation Economics, Inc.
By (Its Secretary-Treasurer) /s/ Xxxxxx X. Xxxxxx
Signed (Bank) /s/ Professional Escrow Services, Inc.
By (Officer) /s/ Xxxxxx Xxxxxx, President
