Legal requirements forced several changes in the original Organisation Plan (OP) of March 2, 1982, which was sent with Information Letter #3. As far as I know, the following list of changes is all-inclusive. None of these changes significantly affects the status of any participant in the company, and none has any adverse affect we've been able to think of.
In the OP the warrants were stated to expire in 18 months. This has been changed to 4 years to give the recipients of the warrants more flexibility in deciding when to convert them into shares. The stock options issued to the out of state people will have the same term.
In the OP, the specifics of the stock option issuance were spelled out in an agreement in principle. The stock option plan finally adopted will be as stated in the OP. At this point, we have in effect a ``legal boilerplate'' option plan which allows the flexibility needed to accommodate the plan described in the OP, plus the ability to bring in the out of state people via options as described in IL #4.
Jack Stuppin is an employee of a member firm of the New York Stock Exchange, and is hence prohibited from being an employee of any other company. As a result, he cannot be an employee of AI, but he can be a director. He can still work for the company in the capacity of director. Since he's not an employee, we can't grant him stock options like the other employees, so we issued him warrants as a director.
The only other change from Information Letter #4 is that Marinchip Systems Ltd. was issued warrants for the stock it is to purchase over the next year. In IL #4, MSL was listed as purchasing stock for a note. Since only employees can purchase stock for a note, and a corporation can't be an employee, we accomplished the same effect by issuing warrants. (Actually this way is slightly better: this way, MSL does not gain a vote in the operation of the company until it comes up with the money. Had we issued it stock for a note, it would gain the votes immediately.)
Editor: John Walker