-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jlv5tRwcotPqMCOqT8hr0ErwNgVIbFdoYI+CfEeXDH3D3mtngJvYyh3orAbeFB56 Lkwl1ORc9frtBIX9Qo0lgQ== 0000912057-02-024094.txt : 20020613 0000912057-02-024094.hdr.sgml : 20020613 20020613151443 ACCESSION NUMBER: 0000912057-02-024094 CONFORMED SUBMISSION TYPE: S-8 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20020613 EFFECTIVENESS DATE: 20020613 FILER: COMPANY DATA: COMPANY CONFORMED NAME: INTRUSION INC CENTRAL INDEX KEY: 0000736012 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER COMMUNICATIONS EQUIPMENT [3576] IRS NUMBER: 751911917 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-8 SEC ACT: 1933 Act SEC FILE NUMBER: 333-90408 FILM NUMBER: 02678234 BUSINESS ADDRESS: STREET 1: 1101 ARAPAHO ROAD CITY: RICHARDSON STATE: TX ZIP: 75081 BUSINESS PHONE: 9722346400 MAIL ADDRESS: STREET 1: 1101 ARAPAHO ROAD CITY: RICHARDSON STATE: TX ZIP: 75081 FORMER COMPANY: FORMER CONFORMED NAME: ODS NETWORKS INC DATE OF NAME CHANGE: 19970507 FORMER COMPANY: FORMER CONFORMED NAME: OPTICAL DATA SYSTEMS INC DATE OF NAME CHANGE: 19950517 FORMER COMPANY: FORMER CONFORMED NAME: INTRUSION COM INC DATE OF NAME CHANGE: 20000601 S-8 1 a2082139zs-8.txt S-8 As filed with the Securities and Exchange Commission on June 13, 2002 Registration No. 333- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM S-8 REGISTRATION STATEMENT Under The Securities Act of 1933 -------------------------- INTRUSION INC. (Exact name of registrant as specified in its charter) Delaware 75-1911917 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 1101 East Arapaho Richardson, Texas 75081 (Address of principle executive offices) 1995 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN OF INTRUSION INC. (FULL TITLE OF THE PLAN) Jay R. Widdig Vice President, Chief Financial Officer, Treasurer and Secretary Intrusion Inc. 1101 East Arapaho Richardson, Texas 75081 (972) 234-6400 (Name, address and telephone number, including area code, of agent for service) Calculation of Registration Fee
- --------------------------------------------------------------------------------------------------------------- Proposed maximum Proposed maximum Title of securities to be Amount to be offering price per aggregate offering Amount of registered registered(1) share(2) price(2) registration fee - --------------------------------------------------------------------------------------------------------------- Common Stock, $0.01 par value per share 100,000 $1.17 $117,000 $10.76 - ---------------------------------------------------------------------------------------------------------------
(1) Pursuant to Rule 416 of the Securities Act of 1933, as amended (the "Securities Act"), shares issuable upon any stock split, stock dividend or similar transaction effected without the Registrant's receipt of consideration with respect to the shares covered hereby are also being registered hereunder. (2) Estimated solely for the purpose of determining the registration fee pursuant to Rule 457(h) of the Securities Act on the basis of the average of the high and low sales prices of the Common Stock of Intrusion Inc. as reported on the Nasdaq Stock Market, National Market System, on June 10, 2002. PART I* INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS ITEM 1. PLAN INFORMATION. ITEM 2. REGISTRANT INFORMATION AND EMPLOYEE PLAN ANNUAL INFORMATION. PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE. The following documents heretofore filed or to be filed by Intrusion Inc. (the "Registrant") with the Securities and Exchange Commission (the "Commission") are incorporated by reference herein: (a) The Registrant's Annual Report on Form 10-K filed with the Commission on March 30, 2002 for the fiscal year ended December 31, 2001 which includes the consolidated financial statements of the Registrant and its subsidiaries and certain supplementary data for the fiscal year ended December 31, 2001 together with the report thereon of Ernst & Young LLP, independent auditors. (b) The Registrant's Quarterly Report on Form 10-Q filed with the Commission on May 3, 2002 for the fiscal quarter ended March 31, 2002 which includes the consolidated financial statements of the Registrant and its subsidiaries for the quarter ended March 31, 2002. (c) The description of the Common Stock of the Registrant incorporated by reference in its Registration Statement on Form 8-A (File No. 0-20191) which was declared effective by the Commission on May 21, 1992, pursuant to Section 12(g) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), including any amendment or report filed for the purpose of updating such description. In addition, all documents filed by the Registrant subsequent to the date of this Registration Statement pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to the filing of a post-effective amendment to this Registration Statement which indicates that all securities offered have been sold or which deregisters all securities then remaining unsold, shall be deemed to be incorporated by reference in this Registration Statement and to be a part hereof from the respective dates of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Registration Statement to the extent that a statement contained herein or in any subsequently filed document which also is deemed to be incorporated by reference 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 registration statement. * Information required by Part I to be contained in the Section 10(a) prospectus is omitted from this Registration Statement in accordance with Rule 428 under the Securities Act of 1933 and the Note to Part I of Form S-8. ITEM 4. DESCRIPTION OF SECURITIES. Not applicable. ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL. Not applicable. ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The Registrant's Certificate of Incorporation, as amended and restated to date, relieves its directors from liability for monetary damages to the fullest extent permitted by Delaware law. Section 145 of the Delaware General Corporation Law provides, in effect, that any person who was or is a party or is threatened to be made a party to any action by reason of the fact that he is or was a director, officer, employee or agent of the Registrant may and, in certain cases, must be indemnified by the Registrant against judgments, fines, amounts paid in settlement and expenses (including attorneys' fees) reasonably incurred by him as a result of such action, and against expenses (including attorneys' fees), if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the Registrant's best interest and with respect to any criminal proceeding in which such person had reasonable cause to believe his conduct was unlawful. This indemnification does not apply, in a derivative action, to matters as to which it is adjudged that the director, officer, employee or agent is liable to the Registrant, unless upon court order it is determined that, despite such adjudication of liability, but in view of all the circumstances of the case, he is fairly and reasonably entitled to indemnity for expenses, that the court deems proper. Article Six, Section 2 of the Registrant's Certificate of Incorporation, as amended and restated to date, provide, in general, that no director of the Registrant shall be personally liable for monetary damages for breach of the director's fiduciary duty as a director, except for liability for (i) any breach of the director's duty of loyalty to the Registrant or its stockholders; (ii) an act or omission not in good faith or an act or omission that involves intentional misconduct or a knowing violation of law; (iii) any liability under Section 174 of the Delaware General Corporation Law (pertaining to unlawful payment of a dividend or an unlawful stock purchase or redemption); or (iv) a transaction from which the director received an improper personal benefit. Article Ten of the Registrant's Certificate of Incorporation, as amended and restated to date, and Article Six of the Registrant's Bylaws, provide, in general, that the Registrant shall indemnify its directors and officers under the circumstances defined in Section 145 of the Delaware General Corporation Law and gives authority to the Registrant to purchase insurance with respect to such indemnification. The Registrant has entered into separate Indemnity Agreements with each of its directors and certain of its executive officers (each, an "Indemnitee"), under which the Registrant will, upon proper request of the Indemnitee, indemnify any Indemnitee if such Indemnitee is a party to or is threatened to be made a party to or is otherwise involved in any third party proceedings or proceedings by or in the right of the Registrant to procure a judgment in its favor by reason of the fact that the Indemnitee is or was a director and/or officer of the Registrant or is or was serving at the request of the Registrant as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against all expenses, judgments, fines and penalties, actually and reasonably incurred by the Indemnitee in connection with the defense or settlement of any of such proceedings; provided that (i) in the case of a third party proceeding, the Indemnitee acted in good faith and in a manner which the Indemnitee reasonably believed to be in or not opposed to the best interests of the Registrant, and in the case of a criminal proceeding, in addition, that the Indemnitee had no reasonable cause to believe that his conduct was unlawful, (ii) in the case of a proceeding by or in the right of the Registrant, the Indemnitee acted in good faith and in a manner which the Indemnitee reasonably believed to be in or not opposed to the best interests of the Registrant and in which the Indemnitee shall not have been adjudged to be liable to the Registrant for negligence or misconduct in the performance of the Indemnitee's duty to the Registrant, unless the court in which such proceeding is brought determines that the Indemnitee is fairly and reasonably entitled to indemnity for expenses as such court deems proper, and (iii) in the case of a proceeding by or in the right of the Registrant, the Indemnitee is only indemnified against expenses and not against any judgment, fines or penalties. Notwithstanding the above, the Registrant shall indemnify an Indemnitee for all expenses incurred in connection with any proceedings to the extent that the Indemnitee has been successful in defense of any such proceeding, or in defense of any claim, issue or matter therein. The Registrant will also, upon proper request of the Indemnitee, pay in advance the expenses incurred by the Indemnitee in any of the above proceedings, if the Indemnitee shall undertake to repay such amounts to the extent it is determined that the Indemnitee is not entitled to indemnification. ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED. Not applicable. ITEM 8. EXHIBITS. The following documents are filed as Exhibits herewith pursuant to Item 601 of Regulation S-K or are incorporated in this Registration Statement by reference to previous filings with the Commission as noted.
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------ ---------------------- 4.1 Instruments Defining Rights of Stockholders. Reference is made to Registrant's Registration Statement on Form 8-A, as amended, and the exhibits thereto, which are incorporated herein by reference pursuant to Item 3(c) of this Registration Statement. 5.1 Opinion of Brobeck, Phleger and Harrison LLP. 23.1 Consent of Independent Auditors. 23.2 Consent of Brobeck, Phleger and Harrison LLP, (included in Exhibit 5.1). 24.1 Power of Attorney (included on the signature page of this Registration Statement). 99.1 Intrusion Inc. 1995 Non-Employee Directors Stock Option Plan, as amended and restated.
ITEM 9. UNDERTAKINGS. The undersigned Registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement: (i) to include any prospectus required by Section 10(a)(3) of the Securities Act; (ii) to reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and (iii) to include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement; provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the Registrant pursuant to Section 13 or Section 15(d) of the Exchange Act that are incorporated by reference in the Registration Statement. (2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof; (3) To remove from registration by means of a post-effective amendment any of the securities being registered that remain unsold at the termination of the offering; and (4) That, for purposes of determining any liability under the Securities Act, each filing of the Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is incorporated by reference in this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, and controlling persons of the Registrant pursuant to the provisions described in Item 6 of this Registration Statement, or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. If a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer, or controlling person of the Registrant in the successful defense of any action, suit, or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. SIGNATURES Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-8 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Richardson, State of Texas, on the 12th day of June, 2002. INTRUSION INC. (REGISTRANT) /s/ G. Ward Paxton ------------------------------------------ G. Ward Paxton Chairman of the Board, President and Chief Executive Officer POWER OF ATTORNEY We, the below signed officers and directors of the Registrant, do hereby constitute and appoint G. Ward Paxton and Jay R. Widdig, with full power of substitution, our true and lawful attorneys-in-fact and agents with full power and authority, to do any and all acts and things in our names in the capacities indicated which G. Ward Paxton and Jay R. Widdig may deem necessary or advisable to enable the Registrant to comply with the Securities Act and any rules, regulations and requirements of the Commission in connection with this Registration Statement, including specifically, but not limited to, the power and authority to sign for us, or any of us, in our names in the capacities indicated, and any and all amendments (including post-effective amendments) to this Registration Statement; and we do hereby ratify and confirm all that G. Ward Paxton and Jay R. Widdig shall do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act, this Registration Statement has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE ---------- ------ ---- /s/ G. WARD PAXTON Chairman of the Board, President, - -------------------------- Chief Executive Officer and Director June 12, 2002 G. Ward Paxton (Principal Executive Officer) /s/ T. JOE HEAD Vice Chairman of the Board and June 12, 2002 - -------------------------- Director T. Joe Head /s/ JAY R. WIDDIG Chief Financial Officer, Vice - -------------------------- President, Secretary and Treasurer June 12, 2002 Jay R. Widdig (Principal Financial and Accounting Officer) /s/ J. FRED BUCY, JR. Director June 12, 2002 - -------------------------- J. Fred Bucy, Jr. /s/ GRANT A. DOVE Director June 12, 2002 - -------------------------- Grant A. Dove /s/ DONALD M. JOHNSTON Director June 12, 2002 - -------------------------- Donald M. Johnston
INDEX TO EXHIBITS
EXHIBIT NUMBER DESCRIPTION OF EXHIBIT ------ ---------------------- 4.1 Instruments Defining Rights of Stockholders. Reference is made to Registrant's Registration Statement on Form 8-A, as amended, and the exhibits thereto, which are incorporated herein by reference pursuant to Item 3(c) of this Registration Statement. 5.1 Opinion of Brobeck, Phleger and Harrison LLP. 23.1 Consent of Independent Auditors. 23.2 Consent of Brobeck, Phleger and Harrison LLP, (included in Exhibit 5.1). 24.1 Power of Attorney (included on the signature page of this Registration Statement). 99.1 Intrusion Inc. 1995 Non-Employee Directors Stock Option Plan, as amended and restated.
EX-5.1 3 a2082139zex-5_1.txt EXHIBIT 5.1 EXHIBIT 5.1 OPINION AND CONSENT OF BROBECK, PHLEGER & HARRISON LLP June 13, 2002 Intrusion Inc. 1101 East Arapaho Richardson, Texas 75081 Re: Intrusion Inc. - Registration Statement for Offering of an Aggregate of 100,000 Shares of Common Stock (the "Shares") ---------------------------------------------------------- Dear Ladies and Gentlemen: We have acted as counsel to Intrusion Inc., a Delaware corporation (the "Company"), in connection with the registration on Form S-8 (the "Registration Statement") under the Securities Act of 1933, as amended (the "Securities Act"), of 100,000 shares of the Company's common stock for issuance under the 1995 Non-Employee Directors Stock Option Plan of Intrusion Inc. (the "Directors Plan"). This opinion is being furnished in accordance with the requirements of Item 8 of Form S-8 and Item 601(b)(5)(i) of Regulation S-K. We have reviewed the Company's charter documents and the corporate proceedings taken by the Company in connection with the establishment and amendment and restatement of the Directors Plan. Based on such review, we are of the opinion that, if, as and when the Shares have been issued and sold (and the consideration therefor received) pursuant to the provisions of stock option agreements duly authorized under the Directors Plan and in accordance with the Registration Statement, such Shares will be duly authorized, legally issued, fully paid and nonassessable. We consent to the filing of this opinion letter as Exhibit 5 to the Registration Statement. In giving this consent, we do not hereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act, the rules and regulations of the Securities and Exchange Commission promulgated thereunder, or Item 509 of Regulation S-K. This opinion letter is rendered as of the date written above and we disclaim any obligation to advise you of facts, circumstances, events or developments which hereafter may be brought to our attention and which may alter, affect or modify the opinion expressed herein. Our opinion is expressly limited to the matters set forth above and we render no opinion, whether by implication or otherwise, as to any other matters relating to the Company, the Directors Plan or the Shares. Very truly yours, /s/ Brobeck, Phleger & Harrison LLP BROBECK, PHLEGER & HARRISON LLP EX-23.1 4 a2082139zex-23_1.txt EXHIBIT 23.1 EXHIBIT 23.1 CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8) pertaining to the 1995 Non-Employee Directors Stock Option Plan of Intrusion Inc. of our report dated January 17, 2002, with respect to the consolidated financial statements and schedule of Intrusion Inc. included in its Annual Report (Form 10-K) for the year ended December 31, 2001, filed with the Securities and Exchange Commission. /s/ Ernst & Young LLP ERNST & YOUNG LLP Dallas, Texas June 10, 2002 EX-99.1 5 a2082139zex-99_1.txt EXHIBIT 99.1 EXHIBIT 99.1 1995 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN OF INTRUSION INC. (AMENDED AND RESTATED AS OF JANUARY 10, 2002) 1. PURPOSE. The purposes of the 1995 Non-Employee Directors Stock Option Plan of Intrusion Inc. (this "Plan") are to promote the growth and prosperity of Intrusion Inc. (the "Company"), to attract and retain the best available people to serve as independent directors of the Company and to encourage stock ownership by such individuals and thus increase their personal interest in the Company's success. 2. ADMINISTRATION. (a) This Plan shall be administered by the Board of Directors of the Company (the "Board"). The Board may from time to time prescribe, amend and rescind such rules, regulations, provisions and procedures, consistent with the terms of this Plan, as may be advisable in its opinion in the administration of this Plan, and subject to the terms of this Plan shall prescribe the provisions of the stock option agreements to be issued hereunder and make all other determinations and interpretations necessary or advisable for administering this Plan and the stock option agreements. (b) A majority of the Board shall constitute a quorum, and the acts of a majority of the members present at any meeting at which a quorum is present, or acts approved in writing by all members of the Board, shall be the acts of the Board. All decisions, determinations and interpretations of the Board shall be final and binding on all persons interested in this Plan. 3. SHARES AND OPTIONS UNDER THIS PLAN. (a) The stock to be subject to stock options granted under this Plan ("Options") shall be shares of the Company's common stock, $.01 par value per share (the "Common Stock"), either authorized and unissued or treasury stock. (b) Subject to any required action by the stockholders of the Company, the number of shares of Common Stock covered by each outstanding Option, the aggregate number of shares of Common Stock that have been authorized for issuance under this Plan, and the exercise price of any outstanding Option, shall be proportionately adjusted for any increase or decrease in the number of issued shares resulting from a stock split, payment of a stock dividend with respect to the Common Stock, recapitalization, combination or reclassification of the Common Stock, or any other change affecting the outstanding Common Stock as a class without receipt of consideration by the Company. Such adjustment shall be made by the Board in its sole discretion, which adjustment shall be final, binding and conclusive. Except as expressly provided herein, no issuance by the Company of 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. (c) In the event of the proposed dissolution or liquidation of the Company, the proposed sale of all or substantially all of the assets of the Company, or the proposed merger of the Company with or into another corporation, any Options shall terminate immediately prior to the consummation of such proposed action, unless otherwise provided by the Board; provided, however, that the Board may, in the exercise of its sole discretion, in such instances declare that any Option shall terminate as of a date fixed by the Board and give each Optionee the right to exercise the Optionee's Option as to all or any part of the Shares covered by such Option, including Shares as to which the Option would not otherwise be exercisable. (d) The total number of shares of Common Stock reserved for issuance or sale upon the exercise of Options shall be 260,000 shares (subject to adjustment in accordance with Section 3(b)). (e) In the event any outstanding Option for any reason expires, is cancelled or otherwise terminates, the shares allocable to the unexercised portion of such Option shall again be available for issuance under this Plan. However, if the sale and remittance procedure described in Section 6(f)(ii) is used, then the number of shares of Common Stock available for issuance pursuant to this Plan shall be reduced by the gross number of shares for which the Option is exercised, and not by the net number of shares of Common Stock issued to the holder of such Option. (f) Nothing in this Plan or in any Option granted pursuant to this Plan shall confer on any individual any right to continue as a director of the Company or interfere in any way with the removal of such person as a director in accordance with the Company's Certificate of Incorporation and Bylaws. Outstanding Options shall in no way affect the right of the Company to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets. 4. ELIGIBILITY AND GRANTS. (a) Each director of the Company who is not at the time of the grant of an Option an officer or employee of the Company (a "Non-Employee Director") shall automatically be granted Options as follows: (i) On the day of a Non-Employee Director's initial appointment or election (whichever comes first) to the Board, such individual shall be granted, without any action on the part of the Board or such individual, an Option to purchase 20,000 shares of Common Stock (subject to adjustment in accordance with Section 3(b)). (ii) Thereafter, upon the date of each annual meeting of the Company's stockholders (beginning with the 2002 annual meeting), such Non-Employee Director shall be granted, without any action on the part of the Board or such individual, an Option to purchase 10,000 shares of Common Stock (subject to adjustment in accordance with Section 3(b)), provided such individual has served as a Non-Employee Director for at least six months. (b) All of the Options shall be non-qualified options, not incentive stock options within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended. 5. OPTION PRICE. The price at which shares of Common Stock may be purchased upon the exercise of an Option shall be 100% of the Fair Market Value (defined below) of the Common Stock on the date the Option is granted. For purposes of this Plan, "Fair Market Value" shall mean (a) if the Common Stock is listed upon an established stock exchange or exchanges, the highest closing price of the Common Stock on such stock exchange or exchanges on the day in question or, if no sale of the Common Stock shall have been made on any stock exchange on such day, on the next preceding day on which there was a sale of the Common Stock; (b) if the Common Stock is not listed upon an established stock exchange, the mean between dealer "bid" and "ask" prices of the Common Stock in the over-the-counter market as reported by the National Association of Securities Dealers, Inc. on the day in question or, if no sale of the Common Stock shall have been made on such day, on the last preceding day on which there was a sale of the Common Stock; and (c) if there is no public market for the Common Stock, such amount as the Board, in its sole discretion, shall determine, after taking all relevant facts into consideration. 6. EXERCISE OF OPTIONS. (a) Subject to Sections 6(b), (c) and (d), each Option shall vest and become exercisable in three successive equal annual installments upon the Non-Employee Director's completion of each year of service as a Board member over a period of three years measured from the date the Option is granted. Each Option shall have a term of ten (10) years and, to the extent not theretofore exercised, shall expire and not be exercisable after the tenth anniversary of the date of its grant. (b) During the lifetime of a Non-Employee Director, Options granted to such Non-Employee Director may be exercised only by such Non-Employee Director. Options shall not be sold, pledged, assigned or transferred in any manner except by will or by the laws of descent and distribution, and any attempt to do so in violation of this prohibition, whether voluntary, involuntary, by operation of law or otherwise, shall immediately void the Option. (c) If a Non-Employee Director dies while serving on the Board, any outstanding Option theretofore granted to such director shall become fully vested as of the date of his or her death and may be exercised by his or her estate or a person who has acquired the right to exercise the Option by will or the laws of descent and distribution at any time or times prior to the first anniversary of the date of such director's death; provided that in no event may such Option be exercised after the tenth anniversary of the date of its grant. Thereafter, such Option shall terminate and cease to be exercisable. (d) If a Non-Employee Director ceases to be a director of the Company for any reason other than death, any outstanding Option may be exercised for the number of shares of Common Stock for which such Option is exercisable at the time the Non-Employee Director ceases to be a director of the Company at any time or times prior to the first anniversary of the date he or she ceased to be a director of the Company; provided that in no event may such Option be exercised after the tenth anniversary of the date of its grant. At the time the Non-Employee Director's ceases to be a director of the Company, the Option shall terminate and cease to be outstanding to the extent the Option is not exercisable. Upon the expiration of the one year exercise period or, if earlier, upon the tenth anniversary of the date of its grant, such Option shall terminate in its entirety and cease to be exercisable. (e) An Option may not be exercised for fractional shares of Common Stock. (f) The Option shall be considered exercised on the day when written notice of such exercise has been received by the Company at its principal place of business from the person entitled to exercise the Option, accompanied by full payment of the purchase price and such other documents, if any, as the Company shall reasonably require. Payment may be made in (i) cash or by certified or cashier's check to the order of the Company or other guaranteed funds or (ii) through a special sale and remittance procedure pursuant to which the person exercising the Option shall concurrently provide irrevocable instructions (A) to a brokerage firm approved by the Company to effect the immediate sale of the purchased shares and remit to the Company, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate purchase price payable for the purchased shares plus all applicable federal, state and local income and employment taxes required to be withheld by the Company by reason of such exercise and (B) to the Company to deliver the certificates for the purchased shares directly to such brokerage firm in order to complete the sale. Upon receipt of all such documents and payments, the Company shall issue the purchased shares. No adjustment will be made for a dividend or other rights for which the record date is prior to the date of the exercise of the Option, except as specifically provided in this Plan. (g) No Non-Employee Director shall have stockholder rights with respect to the shares of Common Stock subject to an Option until he or she has exercised the Option in accordance with Section 6(f) and become a holder of record of the purchased shares. 7. AMENDMENT AND DISCONTINUANCE. The Board may at any time amend this Plan, provided that, except as permitted by Section 3(b), no amendment without the requisite approval of the stockholders of the Company shall: (a) increase the total number of shares for which Options may be granted, (b) change the manner of determining the exercise price at which shares may be purchased, (c) change the class of persons eligible to receive Options under this Plan, (d) change the period during which Options may be exercised or (e) change the provisions relating to the administration of this Plan by the Board. The Board may terminate this Plan at any time but such termination shall not affect Options previously granted and such Options shall remain in full force and effect as if this Plan had not been terminated. 8. SECURITIES ACT OF 1933. Unless (a) the shares to be issued upon exercise of an Option granted under this Plan have been effectively registered under the Securities Act of 1933, as now in force or hereafter amended, or (b) in the opinion of counsel for the Company, no such registration is necessary, the Company shall be under no obligation to issue any shares covered by any Option. The inability of the Company to obtain any authority deemed by the Company's counsel to be necessary to the lawful issuance or sale of any shares of its Common Stock hereunder shall relieve the Company of any liability in respect of the nonissuance or sale of such shares as to which such authority shall not have been obtained. 9. EFFECTIVE DATE; TERM OF PLAN. This Plan originally became effective as of March 21, 1995 and was amended and restated as of January 10, 2002. This Plan shall terminate on March 21, 2005, unless sooner terminated as provided in this Plan. At the end of such term, this Plan shall expire except for Options then outstanding. -----END PRIVACY-ENHANCED MESSAGE-----