Grant _____________
[LOGO]
OAK TECHNOLOGY, INC.
EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT
THIS EMPLOYEE NON-QUALIFIED STOCK OPTION AGREEMENT (this "AGREEMENT") by
and between Oak Technology, Inc., a Delaware corporation (the COMPANY"), and
_____________________________ (the "EMPLOYEE"), is made as of the
________________ (such date being sometimes referred to herein as the "DATE OF
GRANT").
R E C I T A L S
A. The Company has adopted and implemented its 1994 Stock Option Plan (the
"PLAN") permitting the grant of stock options to employees and consultants of
the Company or any Parent or Subsidiary (each as defined in the Plan) of the
Company, some of which are intended to be non-qualified stock options in that
they do not qualify as incentive stock options within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended (the "CODE"), to purchase
shares of the authorized but unissued Common Stock or treasury shares of the
Company, $0.001 par value ("COMMON STOCK").
B. The Board of Directors of the Company (the "BOARD") or the Committee (as
defined in the Plan) (subsequent references herein to the Board shall also mean
the Committee, if such Committee has been appointed) has authorized the granting
of a non-qualified stock option to Employee, thereby allowing Employee to
acquire an ownership interest (or increase his or her existing ownership
interest) in the Company. Unless otherwise defined in this Agreement or the
context otherwise requires, all capitalized terms used in this Agreement shall
have the respective meanings assigned to those terms in the Plan.
A G R E E M E N T
NOW, THEREFORE, in reliance on the foregoing Recitals and in consideration
of the mutual covenants hereinafter set forth, the parties hereby agree as
follows:
1. GRANT OF STOCK OPTION. The Company hereby grants to the Employee a
non-transferable and non-assignable option to purchase an aggregate of up to
________________ shares of the Company's Common Stock at the exercise price of
$________________ per share, upon the terms and conditions set forth herein
(such purchase right being sometimes referred to herein as "the Option" or "this
Option").
2. TERM AND TYPE OF OPTION. Unless earlier terminated in accordance with
Sections 4 or 5.2 hereof, this Option and all rights of the Employee to purchase
Common Stock hereunder shall expire with respect to all of the shares then
subject to this Agreement at 5:00 p.m. Pacific time on ________________. This
Option is a non-qualified stock option in that it is not intended to qualify as
an incentive stock option within the meaning of Section 422 of the Code.
Accordingly, the Employee understands that under current law he or she will
recognize ordinary income for federal income tax purposes upon exercise of this
Option in an amount equal to the excess (if any) of the Fair Market Value (as
defined in the Plan) of the shares of Common Stock so purchased over the
exercise price paid for such shares.
3. EXERCISE SCHEDULE. Subject to the remaining provisions of this
Agreement, this Option shall be exercisable as follows:
3.1 FIRST INSTALLMENT. Commencing upon the Date of Grant (the "INITIAL
EXERCISE DATE"), the Employee may exercise this Option for up to __________
percent (___%) of the shares covered hereby (rounded up to the nearest whole
number of shares).
3.2 SUBSEQUENT INSTALLMENTS. Upon the date occurring one (1) month
after the Initial Exercise Date, and continuing thereafter on each subsequent
monthly anniversary of the Initial Exercise Date, the Employee may exercise this
Option for up to an additional two percent (2%) of the shares covered hereby
(rounded up to the nearest whole number of shares), so that this Option shall
become fully exercisable as of _________________. In no event shall the Option
be exercisable for more shares than the number of shares set forth in Section 1.
3.3 CUMULATIVE NATURE OF EXERCISE SCHEDULE. The exercise dates
specified above refer to the earliest dates on which this Option may be
exercised with respect to the stated percentages of the Common Stock covered by
this Option, and this Option may be exercised with respect to all or any part of
any such percentage of the total shares at any time on or after such dates
(until the expiration date specified in Section 2 above or any earlier
termination of this Option pursuant to Section 4 or 5.2 of this Agreement).
Except as permitted in Section 4, the Employee must be and remain in the employ
of the Company, or of any Parent or Subsidiary of the Company, during the entire
period commencing with the date of grant of this Option and ending with each of
the periods appearing in the above schedule in order to exercise this Option
with respect to the shares applicable to any such period. Any references in this
Agreement to the Employee's employment with the Company shall be deemed to refer
also to the Employee's employment with any Parent or Subsidiary of the Company,
as applicable.
3.4 OVERRIDING LIMITATION ON TIME FOR EXERCISE. Notwithstanding any
other provisions of this Agreement, the Option may not be exercised after the
expiration of ______________ months from the Date of Grant.
4. RIGHTS ON TERMINATION OF EMPLOYMENT. Upon the termination of the
Employee's employment with the Company (or with any Parent or Subsidiary of the
Company), the Employee's right to exercise this Option shall be limited in the
manner set forth in this Section 4 (and this Option shall terminate in the event
not so exercised), and subject to the limitation provided in Section 3.4.
4.1 DEATH. If the Employee's employment is terminated by death, the
Employee's estate may, for a period of twelve (12) months following the date of
such termination, exercise the Option to the extent it was exercisable by the
Employee on the date of such termination. The Employee's estate shall mean the
Employee's legal representative upon death or any person who acquires the right
to exercise the Option by reason of such death in accordance with Section 6.2.
4.2 RETIREMENT. If the Employee's employment is terminated by
voluntary retirement at or after reaching sixty-five (65) years of age, the
Employee may, within three (3) months following the date of such termination,
exercise the Option to the extent it was exercisable by the Employee on the date
of such termination unless the Employee dies prior thereto, in which event the
Employee shall be treated as though the Employee had died on the date of
retirement and the provisions of Section 4.1 above shall apply.
4.3 DISABILITY. If the Employee's employment is terminated because of
a Disability, the Employee may, within twelve (12) months following the date of
such termination, exercise the Option to the extent it was exercisable by the
Employee on the date of such termination unless the Employee dies prior to the
expiration of such period, in which event the Employee shall be treated as
though the Employee's death occurred on the date of termination because of
Disability and the provisions of Section 4.1 above shall apply.
4.4 OTHER TERMINATION. If the Employee's employment is terminated for
any reason other than provided in Sections 4.1, 4.2 and 4.3 above, the Employee
or the Employee's estate may, within three (3) months after the date of the
Employee's termination, exercise the Option to the extent it was exercisable by
the Employee on the date of such termination.
4.5 TRANSFER OF EMPLOYMENT TO RELATED CORPORATION. In the event the
Employee leaves the employ of the Company to become an employee of any Parent or
Subsidiary of the Company or if the Employee leaves the employ of any such
Parent or Subsidiary to become an employee of the Company or of another Parent
or Subsidiary, the Employee shall be deemed to continue as an employee of the
Company for all purposes of this Agreement for so long as employment with a
Parent or Subsidiary continues.
5. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR CHANGE OF CONTROL.
5.1 STOCK SPLITS AND SIMILAR EVENTS. Appropriate adjustments shall be
made in the number and class of shares of capital stock subject to the Plan as
described in Section 2 of the Plan and to any outstanding Options and in the
exercise price of any outstanding Options in the event of a stock dividend,
stock split, reverse stock split, recapitalization, combination,
reclassification, or like change in the capital structure of the Company. In the
event a majority of the shares which are of the same class as the shares that
are subject to outstanding Options are exchanged for, converted into, or
otherwise become shares of another corporation (the "NEW SHARES"), the Company
may unilaterally amend such Options to provide that each Option is exercisable
for New Shares. In the event of any such amendment, the number of shares subject
to and the exercise price of each Option shall be adjusted in a fair and
equitable manner.
5.2 CHANGE OF CONTROL. In the event of a Change of Control (as defined
below), the surviving, continuing, successor, or purchasing corporation or
parent corporation thereof, as the case may be (the "ACQUIRING CORPORATION"),
shall either assume the Company's rights and obligations under outstanding
Options or substitute options for the Acquiring Corporation's stock for such
outstanding Options. Any Options which are neither assumed or substituted for by
the Acquiring Corporation in connection with the Change of Control nor exercised
as of the date of the Change of Control shall terminate and cease to be
outstanding effective as of the date of the Change of Control. A "CHANGE OF
CONTROL" shall be deemed to have occurred in the event any of the following
occurs with respect to the Company:
5.2.1 the direct or indirect sale or exchange by the stockholders
of the Company of all or substantially all of the stock of the Company where the
stockholders of the Company before such sale or exchange do not retain, directly
or indirectly, at least a majority of the beneficial interest in the voting
stock of the Company after such sale or exchange.
5.2.2 a merger or consolidation in which the Company is not the
surviving corporation, other than a merger or consolidation with a wholly-owned
Subsidiary, a reincorporation of the Company in a different jurisdiction, or
other transaction in which there is no substantial change in the Stockholders of
the Company and the Options are assumed or substituted by the Acquiring
Corporation, which assumption or substitution shall be binding on the Employee.
5.2.3 a merger or consolidation in which the Company is the
surviving corporation where the stockholders of the Company before such merger
or consolidation do not retain, directly or indirectly, at least a majority of
the beneficial interest in the voting stock of the Company after such merger or
consolidation.
5.2.4 the sale, exchange, or transfer of all or substantially all
of the assets of the Company other than a sale, exchange, or transfer to one (1)
or more Subsidiaries of the Company.
5.2.5 a liquidation or dissolution of the Company.
5.2.6 any other transaction which qualifies as a "corporate
transaction" under Section 424 of the Code wherein the stockholders of the
Company give up all of their equity interest in the Company (EXCEPT for the
acquisition, sale or transfer of all or substantially all of the outstanding
shares of the Company).
5.3 BOARD'S DETERMINATION FINAL AND BINDING UPON EMPLOYEE. To the
extent that the foregoing adjustments in this Section 5 relate to stock or
securities of the Company, such adjustments shall be made by the Board, whose
determination in that respect shall be final, binding and conclusive. The
Company agrees to give notice of any such adjustment to the Employee; provided,
however, that any such adjustment shall be effective and binding for all
purposes hereof whether or not such notice is given or received.
5.4 NO RIGHTS EXCEPT AS EXPRESSLY STATED. Except as hereinabove
expressly provided in this Section 5, no additional rights shall accrue to the
Employee by reason of any subdivision or combination of shares of the capital
stock of any class or the payment of any stock dividend or any other increase or
decrease in the number of shares of any class or by reason of any dissolution,
liquidation, merger or consolidation or spin-off of assets or of stock of
another corporation, and any issue by the Company of shares of stock of any
class or of securities convertible into shares of stock of any class shall not
affect, and no adjustment by reason thereof shall be made with respect to, the
number or exercise price of shares subject to the Option. Neither the Employee
nor any person claiming under or through the Employee shall be, or have any of
the rights or privileges of, a stockholder of the Company in respect of any of
the shares issuable upon the exercise of
this Option, unless and until this Option is properly and lawfully exercised and
a certificate representing the shares so purchased is duly issued and delivered
to the Employee or to his or her estate.
5.5 NO LIMITATIONS ON COMPANY'S DISCRETION. The grant of the Option
hereby shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or consolidate or to dissolve, liquidate, sell or
transfer all or any part of its business or assets.
6. MANNER OF EXERCISE.
6.1 GENERAL INSTRUCTIONS FOR EXERCISE. The Option shall be exercised
by the Employee by either contacting E*Trade OptionsLink at XXX.XXXXXXXXXXX.XXX
or OptionsLink Customer Services at (000) 000-0000 to process the transaction;
or by completing, executing and delivering to the Company a Notice of Exercise
(the "NOTICE OF EXERCISE"), in substantially the form attached hereto as Exhibit
A, which Notice of Exercise shall specify the number of shares of Common Stock
which the Employee elects to purchase. The Company's obligation to deliver
shares upon the exercise of this Option shall be subject to the Employee's
satisfaction of all applicable federal, state, local and foreign income and
employment tax withholding requirements, if any. Upon receipt of such Notice of
Exercise and of payment of the purchase price (and payment of applicable taxes
as provided above), the Company shall, as soon as reasonably possible and
subject to all other provisions hereof, deliver certificates for the shares of
Common Stock so purchased, registered in the Employee's name or in the name of
his or her legal representative (if applicable). Payment of the purchase price
upon any exercise of the Option shall be made by check acceptable to the Company
or in cash; provided, however, that the Committee may, in its sole and absolute
discretion, accept any other legal consideration to the extent permitted under
applicable laws and the Plan including, without limitation, consummation of an
immediate sale proceeds transaction ("IMMEDIATE SALE PROCEEDS"), which
transaction may be executed (a) through a "same day sale" commitment from the
Employee and a broker-dealer that is a member of the National Association of
Securities Dealers (a "NASD DEALER") whereby the Employee irrevocably elects to
exercise the Option and to sell a portion of the shares of Common Stock so
purchased under the Option to pay for the aggregate exercise price, and whereby
the NASD Dealer irrevocably commits upon receipt of such shares to forward the
aggregate exercise price directly to the Company or (b) through a "margin"
commitment from the Employee and a NASD Dealer whereby the Employee irrevocably
elects to exercise the Option and to pledge the shares of Common Stock so
purchased to the NASD Dealer in a margin account as security for a loan from the
NASD Dealer in the amount of the aggregate exercise price, and whereby the NASD
Dealer irrevocably commits upon receipt of such shares to forward the aggregate
exercise price directly to the Company.
6.2 EXERCISE PROCEDURE AFTER DEATH. To the extent exercisable after
the Employee's death, this Option shall be exercised only by the Employee's
executor(s) or administrator(s) or the person or persons to whom this Option is
transferred under the Employee's will or, if the Employee shall fail to make
testamentary disposition of this Option, under the applicable laws of descent
and distribution. Any such transferee exercising this Option must furnish the
Company with (1) written Notice of Exercise and relevant information as to his,
her or its status, (2) evidence satisfactory to the Company to establish the
validity of the transfer of this Option and compliance with any laws or
regulations pertaining to said transfer, and (3) written acceptance of the terms
and conditions of this Option as contained in this Agreement.
7. NON-TRANSFERABLE. The Option shall, during the lifetime of the Employee,
be exercisable only by the Employee and shall not be transferable or assignable
by the Employee in whole or in part other than by will or the laws of descent
and distribution. If the Employee shall make any such purported transfer or
assignment of the Option, such assignment shall be null and void and of no force
or effect whatsoever.
8. COMPLIANCE WITH SECURITIES AND OTHER LAWS. The Option may not be
exercised and the Company shall not be obligated to deliver any certificates
evidencing shares of Common Stock hereunder if the issuance of shares upon such
exercise would constitute a violation of any applicable requirements of: (i) the
Securities Act of 1933, as amended, (ii) the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), (iii) applicable state or foreign securities laws,
(iv) any applicable listing requirement of any stock exchange on which the
Company's Common Stock is then listed, and (v) any other law or regulation
applicable to the issuance of such shares. Nothing herein shall be construed to
require the Company to register or qualify any securities under applicable
federal, state or foreign securities laws, or take any action to secure an
exemption from such registration and qualification for the issuance of any
securities upon the exercise of the Option. To the extent deemed necessary by
the Company's counsel, shares of Common Stock issued upon exercise of this
Option shall include such legends as in the opinion of the Company's counsel may
be required by applicable federal, state and foreign securities laws.
9. NO RIGHT TO CONTINUED EMPLOYMENT. Nothing contained in this Agreement
shall: (i) confer upon the Employee any right with respect to the continuance of
employment by the Company, or by any Parent or Subsidiary of the Company, or
(ii) limit in any way the right of the Company, or of any Parent or Subsidiary,
to terminate the Employee's employment at any time. Except to the extent the
Company and Employee shall have otherwise agreed in writing, Employee's
employment shall be terminable by the Company (or by a Parent or Subsidiary, if
applicable) at will. The Board in its sole discretion shall determine whether
any leave of absence or interruption in service (including an interruption
during military service) shall be deemed a termination of employment for the
purposes of this Agreement.
10. OPTION SUBJECT TO TERMS OF PLAN. In addition to the provisions hereof,
this Agreement and the Option are governed by, and subject to the terms and
conditions of, the Plan. The Employee acknowledges receipt of a copy of the Plan
(a copy of which is attached hereto as Exhibit B). The Employee represents that
he or she is familiar with the terms and conditions of the Plan, and hereby
accepts the Option subject to all of the terms and conditions thereof, which
terms and conditions shall control to the extent inconsistent in any respect
with the provisions of this Agreement. The Employee hereby agrees to accept as
binding, conclusive and final all decisions and interpretations of the Board as
to any questions arising under the Plan or under this Agreement.
11. INTENT TO COMPLY WITH SEC RULE 16b-3. With respect to Insiders,
transactions under this Agreement are intended to comply with all applicable
conditions of SEC Rule 16b-3 or its successors under the Exchange Act. To the
extent any provision of this Agreement or any action by the Board fails to so
comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the Board. Moreover, in the event this Agreement does not
include a provision required by Rule 16b-3 to be stated herein, such provision
shall be deemed automatically to be incorporated by reference into this
Agreement insofar as Insiders are concerned.
12. NOTICES. All notices and other communications of any kind which either
party to this Agreement may be required or may desire to serve on the other
party hereto in connection with this Agreement shall be in writing and may be
delivered by personal service or by registered or certified mail, return receipt
requested, deposited in the United States mail with postage thereon fully
prepaid, addressed to the other party at the addresses indicated on the
signature page hereof or as otherwise provided below. Service of any such notice
or other communication so made by mail shall be deemed complete on the date of
actual delivery as shown by the addressee's registry or certification receipt or
at the expiration of the third (3rd) business day after the date of mailing,
whichever is earlier in time. Either party may from time to time, by notice in
writing served upon the other as aforesaid, designate a different mailing
address or a different person to which such notices or other communications are
thereafter to be addressed or delivered.
13. FURTHER ASSURANCES. The Employee shall, upon request of the Company,
take all actions and execute all documents requested by the Company which the
Company deems to be reasonably necessary to effectuate the terms and intent of
this Agreement and, when required or permitted by any provision of this
Agreement to transfer all or any portion of the Common Stock purchased hereunder
to the Company (and its assignees), the Employee shall deliver such Common Stock
endorsed in blank or accompanied by Stock Assignments Separate from Certificate
endorsed in blank, so that title thereto will pass by delivery alone. Any sale
or transfer by the Employee of the Common Stock to the Company (and its
assignees) shall be made free of any and all claims, encumbrances, liens and
restrictions of every kind, other than those imposed by this Agreement.
14. SUCCESSORS. Except to the extent the same is specifically limited by
the terms and provisions of this Agreement, this Agreement is binding
upon the Employee and the Employee's successors, heirs and personal
representatives, and upon the Company, its successors and assigns.
15. TERMINATION OR AMENDMENT. Subject to the terms and conditions of the
Plan, the Board may terminate or amend the Plan and/or the Option at any time;
provided, however, that no such termination or amendment may adversely affect
the Option or any unexercised portion hereof without the consent of the
Employee.
16. INTEGRATED AGREEMENT. This Agreement and the Plan constitute the entire
understanding and agreement of the Employee and the Company with respect to the
subject matter contained herein, and there are no agreements, understandings,
restrictions, representations, or warranties between the Employee and the
Company other than those set forth or provided for herein. To the extent
contemplated herein, the provisions of this Agreement shall survive any exercise
of the Option and shall remain in full force and effect.
17. OTHER MISCELLANEOUS TERMS. Titles and captions contained in this
Agreement are inserted only as a matter of convenience and for reference, and in
no way define, limit, extend or describe the scope of this Agreement or the
intent of any provision hereof. This Agreement shall be governed by and
construed in accordance with the laws of the State of California, irrespective
of its choice of law principles.
18. INDEPENDENT TAX ADVICE. The Employee agrees that he or she has obtained
or will obtain the advice of independent tax counsel (or has determined not to
obtain such advice, having had adequate opportunity to do so) regarding the
federal, state and/or foreign income tax consequences of the receipt and
exercise of the Option and of the disposition of Common Stock acquired upon
exercise hereof. The Employee acknowledges that he or she has not relied and
will not rely upon any advice or representation by the Company or by its
employees or representatives with respect to the tax treatment of the Option.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
COMPANY: EMPLOYEE:
OAK TECHNOLOGY, INC.
a Delaware Corporation
[SIGNATURE]
Signature Signature ________________________
By: Xxxx X. Xxxxxxx Name Printed:_____________________
Its: Vice President and CFO
Address:__________________________
Address: 000 Xxxxx Xxxxx __________________________________
Xxxxxxxxx, XX 00000
U.S.A.
SCHEDULE OF EXHIBITS
EXHIBIT A: Oak Technology Exercise Agreement
For Employee Stock Option Agreement
EXHIBIT B: 1994 Stock Option Plan
EXHIBIT A
OAK TECHNOLOGY EXERCISE AGREEMENT
Optionee Name: Social Security #:
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Home Address: Daytime Phone Number:
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OPTION(S) EXERCISED:
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(1) x (2) = (3)
Grant Xxxxx Xxxxx Number of Shares Total Exercise
Number Grant Date NQ** or ISO? Per Share To be exercised Option Price
Plan
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$ $
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$ $
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$ $
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$
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** Total NQ Taxes Due: $
--------------------
Total:
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PAYMENT AND ISSUANCE INSTRUCTIONS:
Attached is my check # __________ in the amount of $__________ to pay for the
exercise of my stock option as listed above. Issue the certificate in my name
and send it to:
/_/ My home address listed above OR /_/ My broker as designated
below:
Broker Name: ______________________________
Company Name: ______________________________
Address: ______________________________
______________________________
Account #: ______________________________
Phone: ______________________________
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REPRESENTATIONS:
_________ I do NOT have access to, nor am I aware of, any inside information
INITIAL regarding Oak Technology, which could OR HAS influenced my decision
to purchase and/or sell this stock.
_________ I hereby agree to notify Oak Technology upon the transfer/sale of
INITIAL my shares acquired under any ISO exercise and agree to hold harmless
Oak Technology regarding the reporting of income subject
to the transfer/sale of these shares. I am not relying on Oak
Technology or E*TRADE Business Solutions Group for any tax advice.
OFFICERS AND DIRECTORS ONLY
I AM an officer and/or director of Oak Technology and I
(initial for each response):
________ have reviewed my transactions relative to Section 16.
________ have held this option 6 months from date of grant.
________ wish/wish not to file an 83 (b) Election.
________ am required to sell pursuant to Rule 144 & have filed
the necessary documentation.
________ understand a Form 4 will be required because of this
transaction.
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The undersigned holder of the stock option(s) described above irrevocably
exercises such option(s) as set forth and herewith makes payment therefore, all
at the price and on the terms and conditions specified in the stock option
agreement(s) pertaining to the option(s) exercised.
INSTRUCTIONS: FAX A COPY OF THE COMPLETED FORM AND THE CHECK TO E*TRADE
BUSINESS SOLUTIONS GROUP, ATTN: EQUITY RESOURCE DIVISION AT FAX (000) 000-0000.
MAIL THIS COMPLETED EXERCISE FORM AND CHECK, MADE PAYABLE TO:
OAK TECHNOLOGY AT 000 XXXXX XXXXX XXXXXXXXX, XX 00000,
ATTN: XXXXX XXXXXXX
OPTIONEE SIGNATURE DATE
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FOR E*TRADE BUSINESS SOLUTIONS GROUP USE ONLY:
Insider List Verified: ____________ Stock Administrator: _________________ Date: ____________
EXHIBIT B
1994 STOCK OPTION PLAN
