Stock Option Plan - Medical Advisory Systems Inc.
MEDICAL ADVISORY SYSTEMS, INC. STOCK OPTION PLAN
A. Purpose and Scope
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The Purposes of this Plan are to encourage stock ownership by key management and
employees of Medical Advisory Systems, Inc. (herein called the "Company"), to
provide an incentive for such employees to expand and improve the profits and
prosperity of the Company, and to assist the Company in attracting and retaining
key personnel through the grant of Options to purchase shares of the Company's
common stock.
B. Definitions
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Unless otherwise required by the context:
. "Board" shall mean the Board of Directors of the Company.
. "Committee" shall mean the Compensation Committee, which is appointed by the
Board of Directors, and which shall be composed of two members of the Board.
. "Company" shall mean Medical Advisory Systems, Inc., a Maryland corporation.
. "Code" shall mean the Internal Revenue Code of 1954, as amended.
. "Option" shall mean a right to purchase Stock, granted pursuant to the Plan.
. "Option Price" shall mean the purchase price for a share of Stock under an
Option, as determined in Section "I" below.
. "Participant" shall mean an employee of the Company, or of any Subsidiary of
the Company, to whom an Option is granted under the Plan.
. "Plan" shall mean this Medical Advisory Systems, Inc. Stock Option Plan.
. "Stock" shall mean the common stock of the Company, par value $.005.
. "Subsidiary" shall mean a subsidiary corporation of the Company, as defined
in 425(f) and 425 (g) of the Code.
C. Stock to be Optioned
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Subject to the provisions of Section "P" of the Plan, the maximum number of
shares of Stock that may be optioned or sold under the Plan is 380,000 shares.
Such shares may be authorized but unissued shares of the Stock of the Company.
D. Administration
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The Committee shall administer the Plan. Two members of the Committee shall
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constitute a quorum for the transaction of business. The Committee shall be
responsible to the Board for the operation of the Plan, and shall make
recommendations to the Board with respect to participation in the Plan by
employees of the Company and its Subsidiaries and with respect to the extent of
that participation. The interpretation and construction of any provision of the
Plan by the Committee shall be final, unless otherwise determined by the Board.
No member of the Board or the Committee shall be liable for any action or
determination made by him in good faith.
E. Eligibility
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The Board, upon recommendation of the Committee, may grant Options to any key
management employee (including an employee who is a director or an officer) of
the Company or its Subsidiaries. Options may be awarded by the Board at any time
and from time to time to new Participants, or to a greater or lesser number of
Participants, and may include or exclude previous Participants, as the Board,
upon recommendation by the Committee, shall determine. Options granted at
different times need not contain similar provisions.
F. Option Price
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The purchase price for Stock under each Option shall be 100 percent of the fair
market value of the Stock at the time the Option is granted, but in no event
less than the par value of the Stock.
G. Terms and Conditions of Options
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Options granted pursuant to the Plan shall be authorized by the Board and shall
be evidenced by agreements in such form as the Board, upon recommendation of the
Committee, shall from time to time approve.
H. Employment Agreement.
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The Board may, in its discretion, include in any Option granted under the Plan a
condition that the Participant shall agree to remain in the employ of, and to
render services to, the Company or any of its Subsidiaries for a period of time
(specified in the agreement) following the date the Option is granted. No such
agreement shall impose upon the Company or any of its Subsidiaries, however, any
obligation to employ the Participant for any period of time.
I. Time and Method of Payment.
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The Option Price shall be paid in full either in cash or under a cash-less
option provision (depending on the form of Option Agreement granted to the
Participant) at the time an Option is exercised under the Plan. Otherwise, an
exercise of any Option granted under the Plan shall be invalid and of no effect.
Promptly after the exercise of an Option and
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the payment of the full Option Price, the Participant shall be entitled to the
issuance of a stock certificate evidencing his ownership of such Stock. A
Participant shall have none of the rights of a shareholder until shares are
issued to him, and no adjustment will be made for dividends or other rights for
which the record date is prior to the date such stock certificate is issued.
J. Number of Shares.
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Each Option shall state the total number of shares of Stock to which it pertains
and the number of Shares to which a participant is entitled under an Option.
agreement.
K. Option Period, and Limitations on Exercise of Options.
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The Board may, in its discretion, provide that an Option may not be exercised in
whole or in part for any period or periods of time specified in the Option
agreement. Except as provided in the Option agreement, an Option may be
exercised in whole in part at any time during its term. No Option may be
exercised after the expiration of five (5) years from the date it is granted. No
Option may be exercised for a fractional share of Stock.
L. Termination of Employment
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Except as provided in Section "N" below, if a participant ceases to be employed
by the Company or any of its Subsidiaries, his Options shall terminate
immediately; provided, however, that if a Participant's cessation of employment
with the Company or its Subsidiaries is due to his retirement with the consent
of the Company or any of its Subsidiaries, the Participant may, at any time
within three months after such cessation of employment, exercise his Options to
the extent that he was entitled to exercise them on the date of cessation of
employment, but in no event shall any option be exercisable more than (5) years
from the date it was granted. The Committee may cancel an Option during the
three-month period referred to in this paragraph, if the Participant engages in
employment or activities contrary, in the opinion of the Committee, to the best
interests of the Company or any Subsidiaries. The Committee shall determine in
each case whether a termination of employment shall be considered a retirement
with the consent of the Company or a Subsidiary, and, subject to applicable law,
whether a leave of absence shall constitute a termination of employment. Any
such determination of the Committee shall be final and conclusive, unless
overruled by the Board.
M. Rights in the Event of Death.
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If a Participant dies while employed by the Company or any of its Subsidiaries,
or within three months after having retired with the consent of the Company or
any of its Subsidiaries, and without having fully exercised his options, the
executors or administrators, or legatees or heirs, of his estate shall have the
right to exercise such Options and to the extent that such deceased Participant
was entitled to exercise the Options and on the date of his death; provided,
however, that in no event shall the
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Options be exercisable more than (5) years from the date they were granted.
N. No Obligations to Exercise Option or Stock Appreciation Rights
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The granting of an Option shall impose no obligation upon the Participant to
exercise such Option.
O. Nonassignability
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Options shall not be transferable other than by will or by the law of decent and
distribution, and during a Participant's lifetime shall be exercisable only by
such Participant.
P. Effect of Change in Stock Subject to the Plan
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The aggregate number of shares of Stock available for Options under the Plan,
the shares subject to any Option, the price per share, shall all be
proportionately adjusted for any increase or decrease in the number of issued
shares of Stock subsequent to the effective date of the Plan resulting from (1)
a subdivision or consolidation of shares or any other capital adjustment, (2)
the payment of a stock dividend, or (3) other increase or decrease in such
shares effected without receipt of consideration by the Company, if the Company
shall be the surviving corporation in any merger or consolidation, any Option
shall pertain, apply and relate to the securities to which a holder of the
number of shares of Stock subject to the Option would have been entitled after
the merger or consolidation.
Upon dissolution or liquidation of the Company, or upon a merger or
consolidation in which the Company is not the surviving corporation, all Options
outstanding under the Plan shall terminate; provided, however, that each
participant (and each other person entitled under this document to exercise an
Option) shall have the right, immediately prior to such dissolution or
liquidation, or such merger or consolidation, to exercise such Participant's
Options in whole or in part, but only to the extent that such Options are
otherwise exercisable under the terms of the Plan.
Q. Amendment and Termination
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The Board, by resolution, may terminate, amend, or revise the Plan with respect
to any shares as to which Options have not been granted. Neither the Board nor
the Committee may, without the consent of the holder of an Option, alter or
impair any Option previously granted under the Plan, except as authorized
herein. Unless sooner terminated, the Plan shall remain in effect for a period
of 10 years from the date of the Plan's adoption by the board. Termination of
the Plan shall not affect any Option previously granted.
R. Agreement and Representation of Employees
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As a condition to the exercise of any portion of an Option, the Company may
require the person exercising such Option or to represent and warrant at the
time of such exercise that any shares of Stock acquired at exercise are being
acquired 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 under the Securities Act of 1933 or nay other
applicable law, regulation, or rule of any governmental agency.
S. Preservation of Shares of Stock
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The Company during the term of this Plan, will at all times reserve and keep
available, and will seek or obtain from any regulatory body having jurisdiction
any requisite authority necessary to issue and to sell, the number of Shares of
Stock that shall be sufficient to satisfy the requirements of this Plan. The
inability of the Company to obtain from any regulatory body having jurisdiction
the authority deemed necessary by counsel for the Company for the lawful
issuance and sale of its stock hereunder shall relieve the Company of any
liability in respect of the failure to issue or sell Stock as to which the
requisite authority has not been obtained.
T. Effective Date of Plan
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The plan shall be effective as of June 21, 1993; the date the Plan was approved
by the Board of Directors.