Common use of BACKGROUND AND INTRODUCTION Clause in Contracts

BACKGROUND AND INTRODUCTION. The Company already has a stock option plan in place and a limited number of options (100) have been issued thereunder. Consideration will be given to amending or otherwise rolling in existing option obligations into the new equity program. The number of shares to be reserved for issuance under the Plan will represent 15% of the total shares of the Company's outstanding common stock, on a fully diluted basis, including shares of common stock to be reserved for issuance under the Plan. Under the Plan, officers and employees of the Company and its subsidiaries will be eligible to receive awards. Moreover, while it is not anticipated that grants will initially be made to consultants and independent contractors, it is recommend that the Plan be flexible and allow for grants to consultants and independent contractors. The Plan will allow for awards of stock options, restricted stock and other types of equity grants. The initial grants under the Plan will fall into two groups, namely, normal option grants and special management grants.