Exhibit 10.2
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QUICK-MED TECHNOLOGIES, INC.
2001 EQUITY INCENTIVE PLAN
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As Approved by the Board of Directors on ___________
1. Purpose. The purpose of the Quick-Med Technologies, Inc. 2001 Equity
Incentive Plan (the "Plan") is to advance the interests of Quick-Med
Technologies, Inc., a Delaware corporation and its subsidiaries (the "Company"),
by providing an additional incentive to attract, retain and motivate highly
qualified and competent persons who are key to the Company, and upon whose
efforts and judgment the success of the Company and its subsidiaries is largely
dependent, including key employees, consultants, independent contractors,
advisory board members, officers and directors, by authorizing the grant of
awards of Common Stock and options to purchase Common Stock of the Company to
persons who are eligible to participate hereunder, thereby encouraging stock
ownership in the Company by such persons, all upon and subject to the terms and
conditions of this Plan.
2. Definitions. As used herein, the following terms shall have the
meanings indicated:
(a) "Award" means any grant or sale pursuant to the Plan of Options,
Restricted Stock, or Stock Grants.
(b) "Award Agreement" means an agreement between the Company and the
recipient of an Award, setting forth the terms and conditions of the
Award.
(c) "Board" shall mean the Board of Directors of the Company.
(d) "Cause" shall mean any of the following:
(i) a determination by the Company that there has been a
willful, reckless or grossly negligent failure by the Participant to
perform his or her duties as an employee of the Company;
(ii) a determination by the Company that there has been a
willful breach by the Optionee of any of the material terms or
provisions of any employment agreement between such Optionee and the
Company;
(iii) any conduct by the Optionee that either results in his
or her conviction of a felony under the laws of the United States of
America or any state thereof;
(iv) a determination by the Company that the Optionee has
committed an act or acts involving fraud, embezzlement,
misappropriation, theft, breach of fiduciary duty or material
dishonesty against the Company, its properties or its personnel;
(v) a determination by the Company that there has been a
willful, reckless or grossly negligent failure by the Optionee to
comply with any rules, regulations, policies or procedures of the
Company, or that the Optionee has engaged in any act, behavior or
conduct demonstrating a deliberate and material violation or
disregard of standards of behavior that the Company has a right to
expect of its employees; or
(vi) if the Optionee, while employed by the Company and for
two years thereafter (or such shorter period as may be stated in any
employment, confidentiality or noncompete agreement with the
Optionee), violates a confidentiality and/or noncompete agreement
with the Company, or fails to safeguard, divulges, communicates,
uses to the detriment of the Company or for the benefit of any
person or persons, or misuses in any way, any Confidential
Information;
provided, however, that, if the Optionee has entered into a written employment
agreement with the Company which remains effective and which expressly provides
for a termination of such Optionee's employment for "cause," the term "Cause"
for purposes of this Plan shall have the meaning as set forth in the Optionee's
employment agreement in lieu of the definition of "Cause" set forth in this
Section 2(d).
(e) "Change of Control" shall mean the acquisition by any person or
group (as that term is defined in the Securities Exchange Act of 1934 (the
"Exchange Act"), and the rules promulgated pursuant to that act) in a
single transaction or a series of transactions of 40% or more in voting
power of the outstanding stock of the Company and a change of the
composition of the Board of Directors so that, within one year after the
acquisition took place, a majority of the members of the Board of
Directors of the Company, or of any corporation with which the Company may
be consolidated or merged, are persons who were not directors or officers
of the Company or one of its Subsidiaries immediately prior to the
acquisition, or to the first of a series of transactions which resulted in
the acquisition of 40% or more in voting power of the outstanding stock of
the Company.
(f) "Code" shall mean the Internal Revenue Code of 1986, as amended.
(g) "Committee" shall mean the stock option or compensation
committee appointed by the Board or, if not appointed, the Board.
(h) "Common Stock" shall mean the Company's Common Stock, par value
$.001 per share.
(i) "Confidential Information" shall mean any and all information
pertaining to the Company's financial condition, clients, customers,
prospects, sources of prospects, customer lists, trademarks, trade names,
service marks, service names, "know-how," trade secrets, products,
services, details of client or consulting contracts, management
agreements, pricing policies, operational methods, site selection, results
of operations, costs and methods of doing business, owners and ownership
structure, marketing practices, marketing plans or strategies, product
development techniques or plans, procurement and sales activities,
promotion and pricing techniques, credit and financial data concerning
customers and business acquisition plans, that is not generally available
to the public.
(j) "Director" shall mean a member of the Board.
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(k) "Employee" shall mean any person, including Officers, Directors,
consultants and independent contractors, who is either employed or engaged
by the Company or any parent or Subsidiary of the Company within the
meaning of Code Section 3401(c) or the regulations promulgated thereunder.
For purposes of any Non-Qualified Option only, any Officer or Director of
the Company shall be considered an Employee even if he or she is not an
employee with the meaning of the first sentence of this section.
(l) "Fair Market Value" of a Share on any date of reference shall be
the Closing Price of a share of Common Stock on the business day
immediately preceding such date, unless the Committee in its sole
discretion shall determine otherwise in a fair and uniform manner. For
this purpose, the "Closing Price" of the Common Stock on any business day
shall be (i) if the Common Stock is listed or admitted for trading on any
United States national securities exchange, the last reported sale price
of the Common Stock on such exchange or reporting system, as reported in
any newspaper of general circulation, (ii) if the Common Stock is quoted
on Nasdaq or any similar system of automated dissemination of quotations
of securities prices in common use, the closing sales price or, if not
available the mean between the closing high bid and low asked quotations
for such day of the Common Stock on such system, or (iii) if neither
clause (i) nor (ii) is applicable, the mean between the high bid and low
asked quotations for the Common Stock as reported by the National
Quotation Bureau, Incorporated if at least two securities dealers have
inserted both bid and asked quotations for the Common Stock on at least
five of the 10 preceding days. If the information set forth in clauses (i)
through (iii) above is unavailable or inapplicable to the Company (e.g.,
if the Company's Common Stock is not then publicly traded or quoted), then
the "Fair Market Value" of a Share shall be the fair market value (i.e.,
the price at which a willing seller would sell a Share to a willing buyer
when neither is acting under compulsion and when both have reasonable
knowledge of all relevant facts) of a share of the Common Stock on the
business day immediately preceding such date as the Committee in its sole
and absolute discretion shall determine in a fair and uniform manner.
(m) "Grant Date" means the date as of which an Option is granted, as
determined under Section 4(a)(i).
(n) "Incentive Stock Option" shall mean an incentive stock option as
defined in Section 422 of the Code.
(o) "Non-Employee Directors" shall have the meaning set forth in
Rule 16b-3(b)(3)(i) under the Securities Exchange Act of 1934, as amended.
(p) "Non-Statutory Stock Option" or "Nonqualified Stock Option"
shall mean an Option which is not an Incentive Stock Option.
(q) "Officer" shall mean the Company's chairman, chief executive
officer, president, principal financial officer, principal accounting
officer (or, if there is no such accounting officer, the controller), any
vice-president of the Company in charge of a principal business unit,
division or function (such as sales, administration or finance), any other
officer who performs a policy-making function, or any other person who
performs similar policy-making functions for the Company. Officers of
Subsidiaries shall be deemed Officers of the Company if they perform such
policy-making functions for the Company. As used in this
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paragraph, the phrase "policy-making function" does not include
policy-making functions that are not significant. Unless specified
otherwise in a resolution by the Board, an "executive officer" pursuant to
Item 401(b) of Regulation S-K (17 C.F.R. ss.229.401(b)) shall be only such
person designated as an "Officer" pursuant to the foregoing provisions of
this paragraph.
(r) "Option" (when capitalized) shall mean any stock option granted
under this Plan.
(s) "Optionee" shall mean a Participant to whom an Option is granted
under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
(t) Participant means any holder of an outstanding Award under the
Plan.
(u) "Plan" shall mean this 2001 Equity Incentive Plan of the
Company, which Plan shall be effective upon approval by the Board, subject
to approval, within 12 months of the date thereof by holders of a majority
of the Company's issued and outstanding Common Stock of the Company.
(v) "Restricted Stock" means a grant or sale of shares of Common
Stock to the Participant subject to a Risk of Forfeiture.
(w) "Restriction Period" means the period of time during which any
grant of Restricted Stock remains at Risk of Forfeiture as described in
Section 4(d) and the applicable Award Agreement.
(x) "Risk of Forfeiture" means a limitation on the right of the
Participant to retain an Award of Restricted Stock, including a right in
the Company to reacquire the Shares at less than their then Fair Market
Value, arising because of the occurrence or non-occurrence of specified
events or conditions.
(y) Stock Grant means the grant of shares of Common Stock not
subject to restrictions or other forfeiture conditions.
(z) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(aa) "Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(bb) "Share" or "Shares" shall mean a share or shares, as the case
may be, of the Common Stock, as adjusted in accordance with Section 10 of
this Plan.
(cc) "Subsidiary" shall mean any corporation (other than the
Company) in any unbroken chain of corporations beginning with the Company
if, at the time of the granting of the Option, each of the corporations
other than the last corporation in the unbroken chain owns stock
possessing 50% or more of the total combined voting power of all classes
of stock in one of the other corporations in such chain.
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(dd) Ten Percent Owner means a person who owns, or is deemed within
the meaning of Section 422(b)(6) of the Code to own, stock possessing more
than 10% of the total combined voting power of all classes of stock of the
Company. Whether a person is a Ten Percent Owner shall be determined with
respect to each Option based on the facts existing immediately prior to
the grant date of such Option.
3. Shares and Options. At no time shall the number of shares of Common
Stock issued pursuant to or subject to outstanding Awards granted under the Plan
exceed 3,000,000 shares of Common Stock; subject, however, to the provisions of
Section 10 of the Plan. Shares of Common Stock issued pursuant to the Plan may
be either authorized but unissued shares or shares held by the Company in its
treasury. For purposes of applying the foregoing limitation, if any Option
expires, terminates, or is cancelled for any reason without having been
exercised in full, or any Award of Restricted Stock should be forfeited by the
recipient thereof, the shares not purchased by the Optionee or forfeited by such
a recipient shall again be available for Awards thereafter to be granted under
the Plan. If any Option granted under this Plan shall terminate, expire, or be
canceled, forfeited or surrendered as to any Shares, the Shares relating to such
lapsed Option shall be available for issuance pursuant to new Options
subsequently granted under this Plan. Upon the grant of any Option hereunder,
the authorized and unissued Shares to which such Option relates shall be
reserved for issuance to permit exercise under this Plan. An Option granted
hereunder shall be either an Incentive Stock Option or a Non-Statutory Stock
Option as determined by the Committee at the time of grant of such Option and
shall clearly state whether it is an Incentive Stock Option or Non-Statutory
Stock Option. All Incentive Stock Options shall be granted within 10 years from
the effective date of this Plan. Awards of Incentive Options granted prior to
shareholder approval of the Plan are hereby expressly conditioned upon such
approval, but in the event of the failure of the shareholders to approve the
Plan shall thereafter and for all purposes be deemed to constitute Non-Statutory
Options.
4. Specific Terms of Awards.
(a) Options.
(i) Date of Grant. The granting of an Option shall take place
at the time specified in the Award Agreement. Only if expressly so
provided in the applicable Award Agreement shall the Grant Date be
the date on which the Award Agreement shall have been duly executed
and delivered by the Company and the Optionee.
(ii) Exercise Price. The price at which shares may be acquired
under each Incentive Option shall be not less than 100% of the Fair
Market Value of Common Stock on the Grant Date, or not less than
110% of the Fair Market Value of Common Stock on the Grant Date if
the Optionee is a Ten Percent Owner. The price at which shares may
be acquired under each Non-Statutory Option shall not be so limited
solely by reason of this Section.
(iii) Option Period. No Incentive Option may be exercised on
or after the tenth anniversary of the Grant Date, or on or after the
fifth anniversary of the Grant Date if the Optionee is a Ten Percent
Owner. The Option period under each Non-Statutory Option shall not
be so limited solely by reason of this Section.
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(iv) Exercisability. An Option may be immediately exercisable
or become exercisable in such installments, cumulative or
non-cumulative, as the Committee may determine. In the case of an
Option not otherwise immediately exercisable in full, the Committee
may accelerate the exercisability of such Option in whole or in part
at any time, provided the acceleration of the exercisability of any
Incentive Option would not cause the Option to fail to comply with
the provisions of Section 422 of the Code.
(v) Termination of Association with the Company. Unless the
Committee shall provide otherwise in the grant of a particular
Option under the Plan, if the Optionee's employment or other
association with the Company and its Affiliates is terminated,
whether voluntarily or otherwise, any outstanding Option of the
Optionee shall cease to be exercisable in any respect not later than
ninety (90) days following such termination and, for the period it
remains exercisable following termination, shall be exercisable only
to the extent exercisable at the date of termination, provided that
if the termination is for Cause, then the Option shall terminate on
the date of termination. Military, sick or other bona fide leave
shall not be deemed a termination of employment or other
association, provided that it does not exceed the longer of ninety
(90) days or the period during which the absent Optionee's
reemployment rights, if any, are guaranteed by statute or by
contract. The Committee in its sole discretion may, by giving
written notice ("cancellation notice"), cancel effective upon the
date of the consummation of any corporate transaction described in
Subsection 5(c) hereof, any Option that remains unexercised on such
date. Such cancellation notice shall be given a reasonable period of
time prior to the proposed date of such cancellation and may be
given either before or after approval of such corporate transaction.
(vi) Exercise of Option. An Option may be exercised by the
Optionee giving written notice, to the Company, specifying the
number of shares with respect to which the Option is then being
exercised. The notice shall be accompanied by payment in the form of
cash, or certified or bank check payable to the order of the Company
in an amount equal to the exercise price of the shares to be
purchased or, if the Committee had so authorized on the grant of any
particular Option hereunder (and subject such conditions, if any, as
the Committee may deem necessary to avoid adverse accounting effects
to the Company) by delivery of shares of Common Stock held at least
six (6) months which have a Fair Market Value equal to the exercise
price of the shares to be purchased. Payment of any exercise price
may also be made through and under the terms and conditions of any
formal cashless exercise program maintained by the Company if the
Stock becomes traded on an established market. Receipt by the
Company of such notice and payment shall constitute the exercise of
the Option. Within 30 days thereafter but subject to the remaining
provisions of the Plan, the Company shall deliver or cause to be
delivered to the Optionee or his agent a certificate or certificates
for the number of shares then being purchased. Such shares shall be
fully paid and nonassessable.
(vii) Limit on Incentive Option Characterization. An Incentive
Option shall be considered to be an Incentive Option only to the
extent that the number of shares of Common Stock for which the
Option first becomes exercisable in a calendar year do not have an
aggregate Fair Market Value (as of the date of the grant of the
Option) in excess of the "current limit". The current limit for any
Optionee for any calendar year shall be $100,000 minus the aggregate
Fair Market Value at the date of grant of the number of shares of
Common Stock available for purchase for the first time in the same
year under each other Incentive Option
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previously granted to the Optionee under the Plan, and under each
other incentive stock option previously granted to the Optionee
under any other incentive stock option plan of the Company and its
Affiliates. Any shares of Common Stock which would cause the
foregoing limit to be violated shall be deemed to have been granted
under a separate Non-Statutory Option, otherwise identical in its
terms to those of the Incentive Option.
(viii) Notification of Disposition. Each person exercising any
Incentive Option granted under the Plan shall be deemed to have
covenanted with the Company to report to the Company any disposition
of such shares prior to the expiration of the holding periods
specified by Section 422(a)(1) of the Code and, if and to the extent
that the realization of income in such a disposition imposes upon
the Company federal, state, local or other withholding tax
requirements, or any such withholding is required to secure for the
Company an otherwise available tax deduction, to remit to the
Company an amount in cash sufficient to satisfy those requirements.
(ix) Other Conditions. In granting Options, the Committee
shall take into consideration the contribution the person has made,
or is expected to make, to the success of the Company or its
Subsidiaries and such other factors as the Committee shall
determine. The Committee shall also have the authority to consult
with and receive recommendations from Officers and other personnel
of the Company and its Subsidiaries with regard to these matters.
The Committee may from time to time in granting Options under this
Plan prescribe such terms and conditions concerning such Options as
it deems appropriate, including, without limitation, (i) the
exercise price or prices of the Option or any installments thereof,
(ii) prescribing the date or dates on which the Option becomes
and/or remains exercisable, (iii) providing that the Option vests or
becomes exercisable in installments over a period of time, and/or
upon the attainment of certain stated standards, specifications or
goals, (iv) relating an Option to the continued employment of the
Optionee for a specified period of time, or (v) conditions or
termination events with respect to the exercisability of any Option,
provided that such terms and conditions are not more favorable to an
Optionee than those expressly permitted herein; provided, however,
that to the extent not canceled pursuant to Section 4(a)(v) hereof,
upon a Change of Control, any Options that have not yet vested shall
vest upon such Change of Control. The Options granted to employees
under this Plan shall be in addition to regular salaries, pension,
life insurance or other benefits related to their employment with
the Company or its Subsidiaries. Neither this Plan nor any Option
granted under this Plan shall confer upon any person any right to
employment or continuance of employment (or related salary and
benefits) by the Company or its Subsidiaries.
(b) Restricted Stock.
(i) Purchase Price. Shares of Restricted Stock shall be issued
under the Plan for such consideration, in cash, other property or
services, as is determined by the Committee.
(ii) Issuance of Certificates. Each Participant receiving a
Restricted Stock Award, subject to subsection (iii) below, shall be
issued a stock certificate in respect of such shares of Restricted
Stock. Such certificate shall be registered in the name of such
Participant, and, if applicable, shall bear an appropriate legend
referring to the terms, conditions, and restrictions applicable to
such Award substantially in the following form:
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"The transferability of this certificate and the shares
represented by this certificate are subject to the terms and
conditions of Quick-Med Technologies, Inc. 2001 Equity
Incentive Plan and an Award Agreement entered into by the
registered owner and Quick-Med Technologies, Inc. Copies of
such Plan and Agreement are on file in the offices of
Quick-Med Technologies, Inc."
(iii) Escrow of Shares. The Committee may require that the
stock certificates evidencing shares of Restricted Stock be held in
custody by a designated escrow agent (which may but need not be the
Company) until the restrictions thereon shall have lapsed, and that
the Participant deliver a stock power, endorsed in blank, relating
to the Stock covered by such Award.
(iv) Restrictions and Restriction Period. During the period
established by the Committee and set forth in the Award Agreement,
i.e., the Restriction Period, Restricted Stock shall be subject to
limitations on transferability and a Risk of Forfeiture (which may
take the form of a right of the Company to repurchase the Restricted
Stock for such consideration, if any, as the Committee shall have
determined at grant) arising on the basis of such conditions,
related to the performance of services, Company or Affiliate
performance or otherwise, as the Committee may determine. Any such
Risk of Forfeiture may be waived, or the Restriction Period
shortened, at any time by the Committee on such basis as it deems
appropriate.
(v) Rights Pending Lapse of Risk of Forfeiture or Forfeiture
of Award. Except as otherwise provided in the Plan, at all times
prior to lapse of any Risk of Forfeiture applicable to, or
forfeiture of, an Award of Restricted Stock, the Participant shall
have all of the rights of a stockholder of the Company, including
the right to vote the shares, and the right to receive any dividends
with respect to the shares of Restricted Stock. The Committee, as
determined at the time of Award, may permit or require the payment
of cash dividends to be deferred and, if the Committee so
determines, reinvested in additional Restricted Stock to the extent
shares are available under Section 3.
(vi) Effect of Termination of Employment or Association.
Unless otherwise determined by the Committee at or after grant and
subject to the applicable provisions of the Award Agreement, upon
termination of a Participant's employment or other association with
the Company and its Affiliates for any reason during the Restriction
Period, all shares of Restricted Stock still subject to Risk of
Forfeiture shall be forfeited or subject to the Company's right of
repurchase (as determined from the form of the Risk of Forfeiture);
provided, however, that military, sick or other bona fide leave
shall not be deemed a termination of employment or other
association, if it does not exceed the longer of ninety (90) days or
the period during which the absent Participant's reemployment
rights, if any, are guaranteed by statute or by contract.
(vii) Lapse of Restrictions. If and when the Restriction
Period expires without a prior forfeiture of the Restricted Stock,
the certificates for such shares shall be delivered to the
Participant promptly if not theretofore so delivered.
(c) Stock Grants. Stock Grants shall be awarded solely in
recognition of significant contributions to the success of the Company or
its Affiliates, in lieu of compensation
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otherwise already due and in such other limited circumstances as the
Committee deems appropriate. Stock Grants shall be made without forfeiture
conditions of any kind.
5. Adjustment of Shares.
(a) Stock Dividend, Etc. In the event of any distribution on Stock
payable in Stock or any split-up or contraction in the number of shares of
Stock after the date of an Award Agreement evidencing an Award, the
remaining number of shares of Stock subject to such Award and the price to
be paid for any share subject to the Award, if any, shall be
proportionately adjusted.
(b) Stock Reclassification. In the event of any reclassification or
change of outstanding shares of Stock, immediately thereafter (and subject
to further adjustment for subsequent events) any outstanding Award shall
thereafter relate to shares of stock or other securities equivalent in
kind and value to those shares which the Participant would have received
if he or she had held of record the full remaining number of shares of
Stock subject to the Award immediately prior to such reclassification or
change.
(c) Consolidation or Merger. Subject to the remainder of this
Section 5(c), in the event of any consolidation or merger of the Company
with or into another company or in case of any sale or conveyance to
another company or entity of the property of the Company as a whole or
substantially as a whole, immediately thereafter (and subject to further
adjustment for subsequent events) any outstanding Award shall thereafter
relate to shares of stock or other securities equivalent in kind and value
to those shares and other securities the Participant would have received
if he or she had held of record the full remaining number of shares of
Stock subject to the Award immediately prior to such consolidation,
merger, sale or conveyance. However, unless any Award Agreement evidencing
the grant of an Option shall provide different or additional terms, in any
such transaction the Committee, in its discretion, may provide instead
that any outstanding Option shall terminate, to the extent not exercised
by the Optionee prior to termination, either (a) at the close of a period
of not less than ten (10) days specified by the Committee and commencing
on the Committee's delivery of written notice to the Optionee of its
decision to terminate such Option without payment of consideration as
provided in the following clause or (b) as of the date of the transaction,
in consideration of the Company's payment to the Optionee of an amount of
cash equal to difference between the aggregate Fair Market Value of the
shares of Stock for which the Option is then exercisable and the aggregate
exercise price for such shares under the Option.
(d) Other. In the event of any corporate action not specifically
covered by the preceding Sections, including but not limited to an
extraordinary cash distribution on Stock, a corporate separation or other
reorganization or liquidation, the Committee may make such adjustment of
outstanding Awards and their terms, if any, as it, in its sole discretion,
may deem equitable and appropriate in the circumstances.
(e) Related Matters. Any adjustment in Awards made pursuant to this
Section 5 shall be determined and made, if at all, by the Committee and
shall include any correlative modification of terms, including of option
exercise prices, Risks of Forfeiture and applicable repurchase prices for
Restricted Stock, which the Committee may deem necessary or appropriate
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so as to ensure the rights of the Participants in their respective Awards
are not substantially diminished nor enlarged as a result of the
adjustment and corporate action. No fraction of a share shall be
purchasable or deliverable upon exercise, but in the event any adjustment
hereunder of the number of shares covered by an Award shall cause such
number to include a fraction of a share, such number of shares shall be
adjusted to the nearest smaller whole number of shares. In the event of
changes in the outstanding Stock by reason of any stock dividend,
split-up, contraction, reclassification, or change of outstanding shares
of Stock of the nature contemplated by this Section 5, the number and kind
of shares of Stock available for the purposes of the Plan as stated in
Section 3 shall be correspondingly adjusted.
(f) Except as otherwise expressly provided herein, the issuance by
the Company of shares of its capital stock of any class, or securities
convertible into or exchangeable for shares of its capital stock of any
class, either in connection with a direct or underwritten sale or upon the
exercise of rights or warrants to subscribe therefor or purchase such
Shares, or upon conversion of shares or obligations of the Company
convertible into such shares or other securities, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of
or exercise price of Shares then subject to outstanding Options granted
under this Plan.
(g) Without limiting the generality of the foregoing, the existence
of outstanding Awards granted under this Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate
(i) any or all adjustments, reclassifications, recapitalizations,
reorganizations or other changes in the Company's capital structure or its
business; (ii) any merger or consolidation of the Company or to which the
Company is a party; (iii) any issuance by the Company of debt securities,
or preferred or preference stock that would rank senior to or above the
Shares subject to outstanding Awards; (iv) any purchase or issuance by the
Company of Shares or other classes of Common Stock or common equity
securities; (v) the dissolution or liquidation of the Company; (vi) any
sale, transfer, encumbrance, pledge or assignment of all or any part of
the assets or business of the Company; or (vii) any other corporate act or
proceeding, whether of a similar character or otherwise.
(h) The Participant shall receive written notice within a reasonable
time prior to the consummation of such action advising the Participant of
any of the foregoing. The Committee 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
his or her Option.
6. Nontransferability of Awards. Except as otherwise provided in this
Section, Awards shall not be transferable, and no Award or interest therein may
be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. All of a
Participant's rights in any Award may be exercised during the life of the
Participant only by the Participant or the Participant's legal representative.
However, the Committee may, at or after the grant of an Award of a Non-Statutory
Option or shares of Restricted Stock, provide that such Award may be transferred
by the recipient to an immediate family member; provided, however, that any such
transfer is without payment of any consideration whatsoever, that no transfer of
an Option shall be valid unless first approved by the Committee, acting in its
sole discretion, and that any Restricted Stock so transferred shall remain
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subject to any applicable restriction on transfer and Risk of Forfeiture. For
this purpose, "immediate family member" means an individual's parents, siblings,
spouse and issue, spouses of such issue and any trust for the benefit of, or the
legal representative of, any of the preceding persons, or any partnership
substantially all of the partners of which are one or more of such persons or
the Participant.
7. Issuance of Shares. As a condition of any sale or issuance of Shares
upon exercise of any Award, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:
(i) a representation and warranty by the Participant to the Company,
at the time any Option is exercised or other Award granted, that he is
acquiring the Shares to be issued to him for investment and not with a
view to, or for sale in connection with, the distribution of any such
Shares; and
(ii) (A) an agreement and undertaking to comply with all of the
terms, restrictions and provisions set forth in any then applicable
shareholders' or other agreement relating to the Shares, including,
without limitation, any restrictions on sale or transferability, any
rights of first refusal and any option of the Company to "call" or
purchase such Shares under then applicable agreements; and
(B) any restrictive legend or legends, to be embossed or
imprinted on Share certificates, that are, in the discretion of the
Committee, necessary or appropriate to comply with the provisions of
any securities law or other restriction applicable to the issuance
of the Shares.
8. Administration of this Plan.
(a) This Plan shall be administered by a Committee which shall
consist of not less than two Directors. In the event the Common Stock is
listed or admitted for trading on any United States national securities
exchange or as otherwise required by or advisable under any applicable
laws, rules or regulations, the Plan shall be administered by a Committee
consisting of not less than two Non-Employee Directors. The Committee
shall have all of the powers of the Board with respect to this Plan. Any
member of the Committee may be removed at any time, with or without cause,
by resolution of the Board and any vacancy occurring in the membership of
the Committee may be filled by appointment by the Board. In making such
determinations, the Committee may take into account the nature of the
services rendered by the respective employees, consultants, and directors,
their present and potential contributions to the success of the Company
and its subsidiaries, and such other factors as the Committee in its
discretion shall deem relevant.
(b) Subject to the provisions of this Plan, the Committee shall have
the authority, in its sole discretion, to: (i) grant Awards, (ii)
determine the terms, conditions and provisions of each Award granted
(which need not be identical) and, with the consent of the holder thereof,
modify or amend each Award, (iii) determine the Participants to whom, and
time or times at which, Awards shall be granted, (iv) determine the number
of Shares to be
11
represented by each Award, (v) defer (with the consent of the Optionee) or
accelerate the exercise date of any Option or vesting date of any Stock
Grant, and (vi) make all other determinations deemed necessary or
advisable for the administration of this Plan, including repricing,
canceling and regranting Awards.
(c) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of this Plan. The Committee's
determinations and its interpretation and construction of any provision of
this Plan shall be final, conclusive and binding upon all Participants and
any holders of any Awards granted under this Plan.
(d) Any and all decisions or determinations of the Committee shall
be made either (i) by a majority vote of the members of the Committee at a
meeting of the Committee or (ii) without a meeting by the unanimous
written approval of the members of the Committee.
(e) No member of the Committee, or any Officer or Director of the
Company or its Subsidiaries, shall be personally liable for any act or
omission made in good faith in connection with this Plan.
9. Interpretation.
(a) This Plan shall be administered and interpreted so that all
Incentive Stock Options granted under this Plan will qualify as Incentive
Stock Options under Section 422 of the Code. If any provision of this Plan
should be held invalid for the granting of Incentive Stock Options or
illegal for any reason, such determination shall not affect the remaining
provisions hereof, and this Plan shall be construed and enforced as if
such provision had never been included in this Plan.
(b) This Plan shall be governed by the laws of the State of Florida.
(c) Headings contained in this Plan are for convenience only and
shall in no manner be construed as part of this Plan or affect the meaning
or interpretation of any part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender shall
be a reference to such other gender as is appropriate.
(e) Time shall be of the essence with respect to all time periods
specified for the giving of notices to the Company hereunder, as well as
all time periods for the expiration and termination of Options in
accordance with Section 9 hereof (or as otherwise set forth in an option
agreement).
(f) It is intended that this Plan shall be administered in
accordance with the disinterested administration requirements of Rule
16b-3 promulgated by the Securities and Exchange Commission ("Rule
16b-3"), or any successor rule thereto. To the extent any provision of
this Plan or action by the Committee fails to so comply, it shall be
deemed null and void, to the extent permitted by law and deemed advisable
by the Committee. Notwithstanding the above, it shall be the
responsibility of each Optionee, not of the Company or the Committee, to
comply with the requirements of Section 16 of the Securities Exchange Act;
and neither the
12
Company nor the Committee shall be liable if this Plan or any transaction
under this Plan fails to comply with the applicable conditions of Rule
16b-3 or any successor rule thereto, or if any such person incurs any
liability under Section 16 of the Securities Exchange Act.
10. Market Standoff or Lock-Up Agreements. Each Participant, if so
requested by the Company or any representative of the underwriters in connection
with any registration of the offering of any securities of the Company under the
Securities Act, shall not sell or otherwise transfer any shares of Common Stock
acquired pursuant to this Plan during the period as may be agreed to by the
Company and such underwriters (the "Lock-Up Period") following the effective
date of such registration. The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restriction until the end of
such Lock-Up Period.
11. Amendment and Discontinuation of this Plan. Either the Board or the
Committee may from time to time amend this Plan or any Award without the consent
or approval of the shareholders of the Company; provided, however, that, except
to the extent provided in Section 9, no amendment or suspension of this Plan or
any Award issued hereunder shall substantially impair any Award previously
granted to any Participant without the consent of such Optionee.
12. Termination Date. This Plan shall terminate 10 years after the date of
adoption by the Board of Directors.
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