This excerpt taken from the FVE DEF 14A filed Apr 11, 2006.
Options. We may grant Options to Eligible Persons. Except as otherwise provided in an Option agreement, an Option must be exercised within 90 days following the termination of the Option holders employment with, or his or her provision of services to, us. In the event that termination is due to death or disability (within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended, or the Code), the Option is exercisable for a maximum of 12 months. Our Compensation Committee makes recommendations regarding the number of common shares subject to an Option, its exercise price, its vesting conditions, the manner and time of its exercise and whether the Option is intended to qualify as an incentive stock option, or ISO, under the Code. ISOs may be issued only to employees of ours or a subsidiary of ours. Options that are not intended to qualify as ISOs are referred to as nonqualified stock options, or NSOs.
In the case of an ISO, the exercise price may not be less than the fair market value of our common shares on the date the Option is granted; provided, however, that in the case of an employee who owns (or is considered to own under Section 424(d) of the Code) shares possessing more than 10% of the total combined voting power of all classes of our shares or any of our subsidiaries, the price at which common shares may be purchased pursuant to an ISO may not be less than 110% of the fair market value of the common shares on the date the ISO is granted.
The duration of the ISOs and NSOs granted under the Stock Plan may be specified pursuant to each respective stock option agreement, but in no event can any ISO be exercisable after the expiration of 10 years after the date of grant. In the case of any employee who owns (or is considered under Section 424(d) of the Code as owning) shares possessing more than 10% of the total combined voting power of all classes of our shares or any of our subsidiaries, no ISO shall be exercisable after the expiration of five years from its date of grant. Options may be exercisable during their entire duration or during any lesser period of time, as will be set forth in the Option agreement.
The Option exercise price may be paid in cash, in common shares owned by the optionee, by delivery of a recourse promissory note secured by the common shares acquired upon exercise of the Option or by means of a cashless exercise procedure in which a broker transmits to us the exercise price in cash, either as a margin loan or against the optionees notice of exercise and confirmation by us that we will issue and deliver to the broker stock certificates for that number of common shares having an aggregate fair market value equal to the exercise price or agrees to pay the Option price to us in cash upon its receipt of stock certificates.