EXHIBIT 10.6
WORLD IMPORTS - U.S.A., INC.
1993 NON-STATUTORY STOCK OPTION PLAN
1. Purpose of this Plan.
This Non-Statutory Stock Option Plan (the "Plan") is intended as an
employment incentive, to aid in attracting and retaining in the employ or
service of WORLD IMPORTS -U.S.A., INC. (the "Company"), a Delaware corporation,
and any Affiliated Corporation, persons of experience and ability and whose
services are considered valuable, to encourage the sense of proprietorship in
such persons, and to stimulate the active interest of such persons in the
development and success of the Company. This Plan provides for the issuance of
non-statutory stock options ("NSOs" or "Options") which are not intended to
qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code").
2. Administration of this Plan.
The Company's Board of Directors ("Board") may appoint and maintain as
administrator of this Plan the Compensation Committee (the "Committee") of the
Board which shall consist of at least three members of the Board. Until such
time as the Committee is duly constituted, the Board itself shall have and
fulfill the duties herein allocated to the Committee. The Committee shall have
full power and authority to designate Plan participants, to determine the
provisions and terms of respective NSOs (which need not be identical as to
number of shares covered by any NSO, the method of exercise as related to
exercise in whole or in installments, or otherwise), including the NSO price,
and to interpret the provisions and supervise the administration of this Plan.
The Committee may in its discretion provide that certain NSOs not vest (that is,
become exercisable) until expiration of a certain period after issuance or until
other conditions are satisfied, so long as not contrary to this Plan.
A majority of the members of the Committee shall constitute a quorum. All
decisions and selections made by the Committee pursuant to this Plan's
provisions shall be made by a majority of its members. Any decision reduced to
writing and signed by all of the members shall be fully effective as if it had
been made by a majority at a meeting duly held. The Committee shall select one
of its members as its chairman and shall hold its meetings at such times and
places as it deems advisable. If at any time the Board shall consist of seven or
more members, then the Board may amend this Plan to provide that the Committee
shall consist only of Board members who shall not have been eligible to
participate in this Plan (or similar stock or stock option plan) of the Company
or its affiliates at any time within one year prior to appointment to the
Committee.
All NSOs granted under this Plan are subject to, and may not be exercised
before, the approval of this Plan by the holders of a majority of the Company's
outstanding shares, and if
such approval is not obtained, all NSOs previously granted shall be void. Each
NSO shall be evidenced by a written agreement containing terms and conditions
established by the Committee consistent with the provisions of this Plan.
3. Designation of Participants.
The persons eligible for participation in this Plan as recipients of NSOs
shall include full-time and part-time employees (as determined by the Committee)
and officers of the Company or of an Affiliated Corporation. In addition,
directors of the Company or any Affiliated Corporation who are not employees of
the Company or an Affiliated Corporation and any attorney, consultant or other
adviser to the Company or any Affiliated Corporation shall be eligible to
participate in this Plan. For all purposes of this Plan, any director who is not
also a common law employee and is granted an option under this Plan shall be
considered an "employee" until the effective date of the director's resignation
or removal from the Board of Directors, including removal due to death or
disability. The Committee shall have full power to designate, from among
eligible individuals, the persons to whom NSOs may be granted. A person who has
been granted an NSO hereunder may be granted an additional NSO or NSOs, if the
Committee shall so determine. The granting of an NSO shall not be construed as a
contract of employment or as entitling the recipient thereof to any rights of
continued employment.
4. Stock Reserved for this Plan.
Subject to adjustment as provided in Paragraph 9 below, a total of
10,000,000 shares of Common Stock, $.0001 par value per share ("Stock"), of the
Company shall be subject to this Plan. The Stock subject to this Plan shall
consist of unissued shares or previously issued shares reacquired and held by
the Company or any Affiliated Corporation, and such amount of shares shall be
and is hereby reserved for sale for such purpose. Any of such shares which may
remain unsold and which are not subject to outstanding NSOs at the termination
of this Plan shall cease to be reserved for the purpose of this Plan, but until
termination of this Plan, the Company shall at all times reserve a sufficient
number of shares to meet the requirements of this Plan. Should any NSO expire or
be canceled prior to its exercise in full, the unexercised shares theretofore
subject to such NSO may again be subjected to an NSO under this Plan.
5. Option Price.
The purchase price of each share of Stock placed under NSO shall not be
less than Eighty Five percent (85%) of the fair market value of such share on
the date the NSO is granted. The fair market value of a share on a particular
date shall be deemed to be the average of either (i) the highest and lowest
prices at which shares were sold on the date of grant, if traded on a national
securities exchange, (ii) the high and low prices reported in the consolidated
reporting system, if traded on a "last sale reported" system, such as NASDAQ,
for over the counter securities, or (iii) the high bid and high asked price for
other over-the-counter securities. If no transactions in the Stock occur on the
date of grant, the fair market value shall be
- 2 -
determined as of the next earliest day for which reports or quotations are
available. If the common shares are not then quoted on any exchange or in any
quotation medium at the time the option is granted, then the Board of Directors
or Committee will use its discretion in selecting a good faith value believed to
represent fair market value based on factors then known to them. The cash
proceeds from the sale of Stock are to be added to the general funds of the
Company.
6. Exercise Period.
(a) The NSO exercise period shall be a term of not more than ten (10)
years from the date of granting of each NSO and shall automatically terminate:
(i) Upon termination of the optionee's employment with the Company
for cause;
(ii) At the expiration of twelve (12) months from the date of
termination of the optionee's employment with the Company for any reason other
than death, without cause; provided, that if the optionee dies within such
nine-month period, subclause (iii) below shall apply; or
(iii) At the expiration of fifteen (15) months after the date of
death of the optionee.
(b) "Employment with the Company" as used in this Plan shall include
employment with any Affiliated Corporation, and NSOs granted under this Plan
shall not be affected by an employee's transfer of employment among the Company
and any Parent or Subsidiary thereof. An optionee's employment with the Company
shall not be deemed interrupted or terminated by a bona fide leave of absence
(such as sabbatical leave or employment by the Government) duly approved,
military leave or sick leave.
7. Exercise of Options.
(a) The Committee, in granting NSOs, shall have discretion to determine
the terms upon which NSOs shall be exercisable, subject to applicable provisions
of this Plan. Once available for purchase, unpurchased shares of Stock shall
remain subject to purchase until the NSO expires or terminates in accordance
with Paragraph 6 above. Unless otherwise provided in the NSO, an NSO may be
exercised in whole or in part, one or more times, but no NSO may be exercised
for a fractional share of Stock.
(b) NSOs may be exercised solely by the optionee during his lifetime, or
after his death (with respect to the number of shares which the optionee could
have purchased at the time of death) by the person or persons entitled thereto
under the decedent's will or the laws of descent and distribution.
- 3 -
(c) The purchase price of the shares of Stock as to which an NSO is
exercised shall be paid in full at the time of exercise and no shares of Stock
shall be issued until full payment is made therefor. Payment shall be made
either (i) in cash, represented by bank or cashier's check, certified check or
money order (ii) in lieu of payment for bona fide services rendered, and such
services were not in connection with the offer or sale of securities in a
capital-raising transaction, (iii) by delivering shares of the Company's Common
Stock which have been beneficially owned by the optionee, the optionee's spouse,
or both of them for a period of at least six (6) months prior to the time of
exercise (the "Delivered Stock") in a number equal to the number of shares of
Stock being purchased upon exercise of the NSO or (iv) by delivery of shares of
corporate stock which are freely tradable without restriction and which are part
of a class of securities which has been listed for trading on the NASDAQ system
or a national securities exchange, with an aggregate fair market value equal to
or greater than the exercise price of the shares of Stock being purchased under
the NSO, or (v) a combination of cash, services, Delivered Stock or other
corporate shares. An NSO shall be deemed exercised when written notice thereof,
accompanied by the appropriate payment in full; is received by the Company. No
holder of an NSO shall be, or have any of the rights and privileges of, a
shareholder of the Company in respect of any shares of Stock purchasable upon
exercise of any part of an NSO unless and until certificates representing such
shares shall have been issued by the Company to him or her.
8. Assignability.
No NSO shall be assignable or otherwise transferable (by the optionee or
otherwise) except by will or the laws of descent and distribution. No NSO shall
be pledged or hypothecated in any manner, whether by operation of law or
otherwise, nor be subject to execution, attachment or similar process.
9. Reorganizations and Recapitalizations of the Company
(a) The existence of this Plan and NSOs granted hereunder shall not affect
in any way the right or power of the Company or its shareholders to make or
authorize any and all adjustments, recapitalizations, reorganizations or other
changes in the Company's capital structure or its business, or any merger or
consolidation of the Company, or any issue of bonds, debentures, preferred or
prior preference stocks ahead of or affecting the Company's Common Stock or the
rights thereof, or the dissolution or liquidation of the Company, or any sale,
exchange or transfer of all or any part of its assets or business, or the other
corporation act or proceeding, whether of a similar character or otherwise.
(b) The shares of Stock with respect to which NSOs may be granted
hereunder are shares of the Common Stock of the Company as currently
constituted. If, and whenever, prior to delivery by the Company of all of the
shares of Stock which are subject to NSOs granted hereunder, the Company shall
effect a subdivision or consolidation of shares or other capital readjustment,
the payment of a Stock dividend, a stock split, combination of shares (reverse
stock split) or recapitalization or other increase or reduction of the number of
shares of the
- 4 -
Common Stock outstanding without receiving compensation therefor in money,
services or property, then the number of shares of Stock available under this
Plan and the number of shares of Stock with respect to which NSOs granted
hereunder may thereafter be exercised shall (i) in the event of an increase in
the number of outstanding shares, be proportionately increased, and the cash
consideration payable per share shall be proportionately reduced; and (ii) in
the event of a reduction in the number of outstanding shares, be proportionately
reduced, and the cash consideration payable per share shall be proportionately
increased.
(c) If the Company is reorganized, merged, consolidated or party to a plan
of exchange with another corporation pursuant to which shareholders of the
Company receive any shares of stock or other securities, there shall be
substituted for the shares of Stock subject to the unexercised portions of
outstanding NSOs an appropriate number of shares of each class of stock or other
securities which were distributed to the shareholders of the Company in respect
of such shares of Stock in the case of a reorganization, merger, consolidation
or plan of exchange; provided, however, that all such NSOs may be canceled by
the Company as of the effective date of a reorganization, merger, consolidation,
plan of exchange, or any dissolution or liquidation of the Company, by giving
notice to each optionee or his personal representative of its intention to do so
and by permitting the purchase of all the shares subject to such outstanding
NSOs for a period of not less than thirty (30) days during the sixty (60) days
next preceding such effective date.
(d) Except as expressly provided above, the Company's issuance of shares
of Stock of any class, or securities convertible into shares of Stock of any
class, for cash or property, or for labor or services, either upon direct sale
or upon the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into shares of
Stock or other securities, shall not affect, and no adjustment by reason thereof
shall be made with respect to, the number of shares of Stock subject to NSOs
granted hereunder or the purchase price of such shares.
10. Purchase for Investment.
Unless the shares of Stock covered by this Plan have been registered under
the Securities Act of 1933, as amended, each person exercising an NSO under this
Plan may be required by the Company to give a representation in writing that he
is acquiring such shares for his own account for investment and not with a view
to, or for sale in connection with, the distribution of any part thereof.
11. Effective Date and Expiration of this Plan.
This Plan shall be effective as of June 1, 1993, the date of its adoption
by the Board, subject to the approval of the Company's shareholders, and no NSO
shall be granted pursuant to this Plan after its expiration. This Plan shall
expire on June 1, 2003 except as to NSOs then outstanding, which shall remain in
effect until they have expired or been exercised.
- 5 -
12. Amendments or Termination.
The Board may amend, alter or discontinue this Plan at any time in such
respects as it shall deem advisable in order to conform to any change in any
other applicable law, or in order to comply with the provisions of any rule or
regulation of the Securities and Exchange Commission required to exempt this
Plan or any NSOs granted thereunder from the operation of Section 16(b) of the
Securities Exchange Act of 1934, as amended ("Exchange Act"), or in any other
respect not inconsistent with Section 16(b) of the Exchange Act; provided, that
no amendment or alteration shall be made which would impair the rights of any
participant under any NSO theretofore granted, without his consent (unless made
solely to conform such NSO to, and necessary because of, changes in the
foregoing laws, rules or regulations), and except that no amendment or
alteration shall be made without the approval of shareholders which would:
(a) Increase the total number of shares reserved for the purposes of this
Plan or decrease the NSO price provided for in Paragraph 5 (except as provided
in Paragraph 9), or change the classes of persons eligible to participate in
this Plan as provided in Paragraph 3; or
(b) Extend the NSO period provided for in Paragraph 6; or
(c) Materially increase the benefits accruing to participants under this
Plan; or
(d) Materially modify the requirements as to eligibility for participation
in this Plan; or
(e) Extend the expiration date of this Plan as set forth in Paragraph 11.
13. Government Regulations.
This Plan, and the granting and exercise of NSOs hereunder, and the
obligation of the Company to sell and deliver shares of Stock under such NSOs,
shall be subject to all applicable laws, rules and regulations, and to such
approvals by any governmental agencies or national securities exchanges as may
be required.
14. Liability.
No member of the Board of Directors, the Committee or officers or
employees of the Company or any Affiliated Corporation shall be personally
liable for any action, omission or determination made in good faith in
connection with this Plan.
15. Miscellaneous.
(a) The term "Affiliated Corporation" used herein shall mean any Parent or
Subsidiary.
- 6 -
(b) The term "Parent" used herein shall mean any corporation owning 50
percent or more of the total combined voting stock of all classes of the Company
or of another corporation qualifying as a Parent within this definition.
(c) The term "Subsidiary" used herein shall mean any corporation more than
50 percent of whose total combined voting stock of all classes is held by the
Company or by another corporation qualifying as a Subsidiary within this
definition.
16. Options in Substitution for Other Options.
The Committee may, in its sole discretion, at any time during the term of
this Plan, grant new options to an employee under this Plan or any other stock
option plan of the Company on the condition that such employee shall surrender
for cancellation one or more outstanding options which represent the right to
purchase (after giving effect to any previous partial exercise thereof) a number
of shares, in relation to the number of shares to be covered by the new
conditional grant hereunder, determined by the Committee. If the Committee shall
have so determined to grant such new options on such a conditional basis ("New
Conditional Options"), no such New Conditional Option shall become exercisable
in the absence of such employee's consent to the condition and surrender and
cancellation as appropriate. New Conditional Options shall be treated in all
respects under this Plan as newly granted options. Option may be granted under
this Plan from time to time in substitution for similar rights held by employees
of other corporations who are about to become employees of the Company or an
Affiliated Corporation, or the merger or consolidation of the employing
corporation with the Company or an Affiliated Corporation, or the acquisition by
the Company or an Affiliated Corporation of the assets of the employing
corporation, or the acquisition by the Company or an Affiliated Corporation of
stock of the employing corporation as the result of which it becomes an
Affiliated Corporation.
17. Withholding Taxes.
Pursuant to applicable federal and state laws, the Company may be required
to collect withholding taxes upon the exercise of a NSO. The Company may
require, as a condition to the exercise of a NSO, that the optionee concurrently
pay to the Company the entire amount or a portion of any taxes which the Company
is required to withhold by reason of such exercise, in such amount as the
Committee or the Company in its discretion may determine. In lieu of part or all
of any such payment, the optionee may elect to have the Company withhold from
the shares to be issued upon exercise of the option that number of shares having
a Fair Market Value equal to the amount which the Company is required to
withhold.
- 7 -