SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c)
of the Securities Exchange Act of 1934, as amended
(Amendment No.__)
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14c-5(d) (2))
[X] Definitive Information Statement
COMMODORE MINERALS, INC.
(Name of Registrant as Specified In Its Charter)
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and state how it was determined.
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[ ] Check box if any part of the fee is offset as provided by
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(4) Date Filed:
Commodore Minerals, Inc.
d/b/a
INTAC International
Unit 1809, 18/F., Modern Warehouse
6 Shing Yip Street, Kwun Tong
Kowloon, Hong Kong
________________________________________
INFORMATION STATEMENT
AND
NOTICE OF ACTION TAKEN WITHOUT A MEETING
________________________________________
This information statement is being furnished in connection
with action taken by one or more shareholders holding a majority
of the voting power of our company. On November 28, 2001, our
board of directors approved the following actions:
* The amendment and restatement of our articles of
incorporation which, among other things, accomplishes
the following:
* changes the formal corporate name of the company
from "Commodore Minerals, Inc." to "INTAC
International, Inc.;"
* increases the indemnification protection afforded to
our officers and directors; and
* adds 10,000,000 shares of "blank check" preferred
stock to our authorized capitalization.
* The adoption of a 2001 Long Term Incentive Plan to
provide for the issuance of up to 2,500,000 shares of
our common stock upon the exercise of stock options
granted to directors, officers, employees, consultants
and advisors under the terms of the Plan.
Pursuant to Section 78.320 of the Nevada General Corporation
Law, the holders of a majority of a corporation's voting power
may take any action by execution of a written consent that could
have been taken at a meeting of the stockholders. As of
December 18, 2001, we had 19,089,455 shares of our common stock
outstanding, with each holder of common stock entitled to cast
one vote for each share of common stock then registered in such
holder's name. On December 18, 2001, Wei Zhou, our Chief
Executive Officer, President and a director, executed a written
consent with respect to the 11,950,000 shares of common stock
owned by him (representing 62.6% of the total outstanding shares)
that approved the Amended and Restated Articles and approved the
Plan. The amendment to the articles of incorporation and the
implementation of the Plan will be effective on January 10, 2002
(20 calendar days following the mailing of this information statement).
There will not be a meeting of shareholders and none is
required under Nevada General Corporation Law when an action has
been approved by written consent of the holders of a majority of
the outstanding shares of our common stock.
This information statement is first being mailed on or about
December 21, 2001, to the holders of our outstanding common stock
as of December 18, 2001, the date the shareholder written consent
was signed and delivered to us.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
AMENDED AND RESTATED ARTICLES OF INCORPORATION
On November 28, 2001, our board approved, subject to the
approval of our shareholders, the Amended and Restated Articles
of Incorporation attached hereto as Exhibit A, which provide for:
* changing our name from "Commodore Minerals, Inc." to
"INTAC International, Inc.;"
* indemnifying our officers and directors to the fullest
extent permitted under the Nevada General Corporation
Law; and
* providing for "blank check" preferred stock.
On December 18, 2001, Wei Zhou, holder of 11,950,000 shares
of our common stock (representing 62.6% of the total shares
outstanding), approved the Amended and Restated Articles. Mr.
Zhou is our Chief Executive Officer, President and a director.
Change in the Corporation's Name
Pursuant to an Agreement and Plan of Reorganization dated
October 13, 2001 (the "Reorganization Agreement"), we acquired
ownership of all of the outstanding shares of Intac International
Holdings Limited, a Hong Kong corporation, and its wholly-owned
subsidiary, New Tech Handels GmbH, a German corporation.
Commencing with the acquisition of these companies, we have
effectively become a distributor of wireless handsets in the
global wireless telecommunications marketplace and are no longer
carrying on our historical business of mineral exploration. We
began using the name "INTAC International" as a trade name on
October 13, 2001. Our board believed that the name change would
better reflect the new direction of our operations and take
advantage of the name recognition of our newly acquired
subsidiary, Intac International Holdings Limited. We believe
that the continued use of our trade name without modification of
our corporate name will create unnecessary confusion among
customers and market participants and will dilute the
effectiveness of our branding efforts. We further believe that
the negative effects of a name change (i.e., the costs to change
the corporate logo, corporate signage, etc.) are largely
inapplicable in this situation in light of the fact that the
company has already incurred a majority of these costs in
connection with its decision to begin doing business under a
trade name. Accordingly, our board believes that the formal
corporate name change to be effected pursuant to the proposed
amendment is in the best interests of our company and its
stockholders.
Officer and Director Indemnification
Nevada law provides that a corporation may indemnify any
person who was or is a party or is threatened to be made a party,
by reason of the fact that he or she was an officer or director
of such corporation, or is or was serving at the request of such
corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other
enterprise, to (x) any threatened, pending or completed action or
suit by or in the right of the corporation against expenses,
including amounts paid in settlement and attorneys' fees,
actually and reasonably incurred by him or her, in connection
with the defense or settlement of the action or suit if he or she
acted in good faith and in a manner which he or she reasonably
believed to be in, or not opposed to, the best interests of the
corporation, except that indemnification may not be made for any
claim, issue or matter as to which he or she has been adjudged by
a court of competent jurisdiction, after exhaustion of all
appeals therefrom, to be liable to the corporation or for amounts
paid in settlement to the corporation, unless and only to the
extent that the court in which the action or suit was brought or
other court of competent jurisdiction determines upon application
that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as
the court deems proper, and (y) any other threatened, pending or
completed action, suit or proceeding against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement,
actually and reasonably incurred by him or her in connection with
the action, suit or proceeding, if he or she acted in good faith
and in a manner which he or she reasonably believed to be in, or
not opposed to, the best interests of the corporation and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his or her conduct was unlawful.
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To the extent that a director, officer, employee or agent
has been successful on the merits or otherwise in defense of any
such action, suit or proceeding or in defense of any claim, issue
or matter therein, the corporation must indemnify him or her
against expenses, including attorneys' fees, actually and
reasonably incurred by him or her in connection with the defense.
The articles of incorporation, bylaws or an agreement made by the
corporation may provide that the expenses of officers and
directors incurred in defending any such action must be paid as
incurred and in advance of the final disposition of such action,
upon receipt of an undertaking by or on behalf of the director or
officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he or she is not entitled to
be indemnified by the corporation. Nevada law also permits the
corporation to purchase and maintain insurance on behalf of the
corporation's directors and officers against any liability
arising out of their status as such, whether or not the
corporation would have the power to indemnify him against such
liability. These provisions may be sufficiently broad to
indemnify such persons for liabilities arising under the
Securities Act of 1933, as amended.
Our Amended and Restated Articles provide that we shall
indemnify any of our directors or officers in connection with
certain actions, suits or proceedings, against expenses,
including attorneys' fees, judgments, fines and amounts paid in
settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he or she acted in good
faith and in a manner he or she reasonably believed to be in or
not opposed to our best interests, and with respect to any
criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful.
Our Amended and Restated Articles also provide that none of
our officers or directors shall be personally liable to us or our
stockholders for monetary damages for breach of fiduciary duties
as an officer or director, provided that such provision does not
eliminate or limit the liability of a director or officer to the
extent provided by applicable law for (a) acts or omissions that
involve intentional misconduct, fraud or a knowing violation of
law, or (b) authorizing the payment of illegal dividends or
distributions.
We believe that the proposed amendments are desirable so
that we can continue to attract and retain responsible
individuals to serve as our directors and officers in light of
the present difficult environment in which such persons must
serve. In recent years, investigations, claims, actions, suits
and other proceedings, including stockholder derivative actions
seeking to impose liability on, or involving as witnesses,
directors and officers of publicly held corporations, have become
the subject of much public discussion. Such proceedings are
typically expensive, whatever their eventual outcome. As a
result, an individual may conclude that potential exposure to the
costs and risks of proceedings in which he or she may become
involved exceeds any benefit to him or her from serving as a
director or officer of a publicly held corporation. As a result,
our board believes that an amendment to expand the
indemnification protection afforded to our officers and directors
is in the best interests of our company and its stockholders.
Addition of "Blank Check" Preferred Stock
After the Amended and Restated Articles become effective, we
will have:
* 100,000,000 shares of common stock, of which 19,089,455
shares are expected to be outstanding; and
* 10,000,000 shares of "blank check" preferred stock, of
which no shares are expected to be outstanding.
The term "blank check" preferred stock refers to stock for
which the designations, preferences, conversion rights,
cumulative, relative, participating, optional or other rights,
including voting rights, qualifications, limitations or
restrictions thereof (collectively, the "Limitations and
Restrictions") are determined by the board of directors of a
company. As such, our board of directors will, upon the filing
of our Amended and Restated Articles, be entitled to authorize
the creation and issuance of 10,000,000 shares of preferred stock
in one or more series with such Limitations and Restrictions as
may be determined in the board's sole discretion, with no further
authorization by security holders required for the creation and
issuance thereof.
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The board of directors is required to make any determination
to issue shares of preferred stock based on its judgment as to
the best interests of the shareholders and the corporation.
Although the board of directors has no present intention of doing
so, it could issue shares of preferred stock that could,
depending on the terms of such series, make more difficult or
discourage an attempt to obtain control of the corporation by
means of a merger, tender offer, proxy contest or other means.
When in the judgment of the board of directors this action will
be in the best interest of the shareholders and the corporation,
such shares could be used to create voting or other impediments
or to discourage persons seeking to gain control of the
corporation. Such shares could be privately placed with
purchasers favorable to the board of directors in opposing such
action. In addition, the board of directors could authorize
holders of a series of preferred stock to vote either separately
as a class or with the holders of our common stock, on any
merger, sale or exchange of assets by us or any other
extraordinary corporate transaction. The existence of the
additional authorized shares could have the effect of
discouraging unsolicited takeover attempts. The issuance of new
shares also could be used to dilute the stock ownership of a
person or entity seeking to obtain control of the corporation
should the board of directors consider the action of such entity
or person not to be in the best interest of the stockholders and
the corporation.
While we may consider effecting an equity offering of
preferred stock in the proximate future for purposes of raising
additional working capital or otherwise, as of the date hereof,
we have no agreements or understandings with any third party to
effect any such offering and no assurances are given that any
offering will in fact be effected.
Our board of directors believes that the creation of the
preferred stock is in the best interests of the corporation and
its shareholders and believes it advisable to authorize such
shares to have them available for, among other things, possible
issuance in connection with such activities as public or private
offerings of shares for cash, dividends payable in stock of the
corporation, acquisitions of other companies, implementation of
employee benefit plans, and otherwise.
Approval of Action
The affirmative vote of the holders of a majority of the
outstanding shares of common stock is required to amend and
restate articles of incorporation under Nevada General
Corporation Law. The board has obtained this approval through the
written consent of Wei Zhou, our Chief Executive Officer,
President and a director who owns in excess of a majority of the
voting control of our company. Thus, a meeting to approve the
Amended and Restated Articles is unnecessary, and our board
decided to forego the expense of holding a meeting to approve
this matter.
The amendment to our articles of incorporation will become
effective upon the filing of Amended and Restated Articles with
the Secretary of State of Nevada, which is expected to occur on
January 10, 2002, (which is 20 calendar days following the mailing
of this information statement to our shareholders).
4
ADOPTION OF INTAC INTERNATIONAL 2001 LONG TERM INCENTIVE PLAN
On November 28, 2001, our board approved, subject to the
approval of our shareholders, the INTAC International, Inc. 2001
Long Term Incentive Plan ("Plan") attached hereto as Exhibit B.
On December 18, 2001, Wei Zhou, holder of 11,950,000 shares of
our common stock (representing 62.6% of the total shares
outstanding), approved the Plan. Mr. Zhou is our Chief Executive
Officer, President and a director.
Purpose; Eligibility
The purpose of the Plan is to promote our interests and the
interests of our shareholders by using options for the purchase
of shares of our common stock to attract, retain and motivate our
management and other persons, to encourage and reward their
contributions to our performance and to align their interests
with the interests of our shareholders. The Plan authorizes the
granting of incentive stock options under Section 422 of the
Internal Revenue Code of 1986, as amended, and nonqualified stock
options (options that do not qualify as incentive stock options)
to our and our subsidiaries' directors, officers, key employees,
and certain consultants.
Effectiveness; Termination
The Plan was originally approved and adopted by our board on
November 28, 2001 and by shareholders holding a majority of the
issued and outstanding shares of our common stock by written
consent of such shareholders, dated December 18, 2001. Unless
previously discontinued by the Administering Body, the Plan will
terminate on November 28, 2011.
Administration
Our board has retained authority to administer the Plan.
Pursuant to the Plan, the board may, at its discretion, appoint a
committee of at least two non-employee directors to administer
the Plan. The administrating body of the Plan (whether the board
of directors or a designated committee) is referred to herein as
the "Administering Body."
The Administering Body has authority to, among other things:
* select the persons to whom options will be granted
from the pool of our and our subsidiaries' directors,
officers, key employees, and certain consultants;
* determine the nature of each option granted;
* determine the number of shares of common stock for
which each granted option shall be exercisable;
* set the exercise price for the options;
* establish certain other terms of the grants
(including vesting schedules and option
exercisability period);
* interpret, construe and implement the provisions of
the Plan; and
* suspend, discontinue, revise or amend the Plan.
The Plan is not subject to the provisions of the Employee
Retirement Income Security Act of 1974.
Suspension, Discontinuance, Revision and Amendment of the Plan
The Administering Body may, at any time, suspend,
discontinue, revise or amend the Plan and the Plan as so revised
or amended will govern all options granted thereunder, including
those granted before such revision or amendment. No such
revision or amendment shall be made without first obtaining
approval of the shareholders of
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the Company to the extent such approval is required by applicable
law, rule or regulation or the requirements of any stock exchange
or automated quotation system then listing our common stock. No
revision or amendment shall materially alter, impair or diminish
any rights or obligations under any option previously granted
(without the written consent of the affected participant(s)).
Shares Subject to the Plan
Subject to adjustment as described below, an aggregate of
2,500,000 shares of common stock is available for grants of
options under the Plan. The maximum number of shares as to which
options may be granted to participants under the Plan, the number
and kind of shares that can be granted to a single participant
under the Plan, the number and kind of shares covered by each
outstanding option under the Plan, and/or the price per share
subject to outstanding options under the Plan will, upon a
determination made by the Administering Body, all be
proportionately adjusted (i) for any increase or decrease in the
number of issued shares of common stock resulting from an
increase, decrease or exchange in the outstanding shares of
common stock or additional shares or new or different shares are
distributed in respect of such shares of common stock, through
merger, consolidation, sale or exchange of all or substantially
all of our assets, reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock
split, spin-off, split-off or other distribution with respect to
such shares or (ii) if the value of the outstanding shares of
common stock is reduced by reason of an extraordinary dividend
payable in cash or property. Common stock subject to the
provisions of the Plan will either be shares of authorized but
unissued common stock or shares of common stock held as treasury
stock (including shares purchased on the open market).
Grants of Options under the Plan
Under the Plan, the Administering Body may grant either
incentive stock options or nonqualified stock options for such
number of shares of common stock as the Administering Body
determines, except that the maximum number of shares of common
stock that may be issued pursuant to incentive options granted
under the Plan may not exceed 2,500,000 shares and no participant
may be granted options to acquire more than 2,500,000 shares of
common stock in any one calendar year.
The Administering Body also determines the exercise
price for options granted under the Plan. The exercise price
of any incentive stock option granted under the Plan must be
equal to the fair market value of the common stock on the
date of the grant (or at least one hundred ten percent (110%)
in the case of incentive stock options granted to certain
employees owning more than ten percent (10%) of our outstanding
voting stock). Under the terms of the Plan, the "fair market
value" of our common stock is the average of the closing bid
and asked prices on the NASD's over-the-counter bulletin board
(OTCBB) system. As of December 18, 2001, the fair market value
of our common stock was $5.95 per share.
Each option granted under the Plan will be evidenced by a
written option agreement issued to the participant. We are under
no obligation to ensure that the terms contained in the various
stock option agreements we issue are identical. As such,
participants in the Plan may have different rights under the
Plan.
Nothing in the Plan or in any option granted pursuant to it
confers upon any participant any right to continue in the employ
of or engagement with us (or any of our subsidiaries) or to
interfere in any way with our (or our subsidiaries') right to
terminate the employment or engagement of any person at any time.
The holder of an option granted pursuant to the Plan does
not have any of the rights or privileges of a shareholder, except
with respect to shares that have actually been issued.
Shareholders are urged to read the Plan in its entirety.
Exercise of Stock Options
Each option is exercisable at any time after the date on
which the option, or any portion thereof, vests until the option
expires. No stock option may be exercised after the expiration of
ten (10) years from the date of grant (or five (5) years in the
case of incentive stock options granted to certain employees
owning more than ten percent (10%) of the outstanding voting
stock). Pursuant to the Plan, the aggregate fair market value of
the common stock
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for which one or more incentive stock options granted to any
participant may for the first time become exercisable as
incentive stock options under the federal tax laws during any one
calendar year shall not exceed $100,000.
A stock option may be exercised in whole or in part
according to the terms of the applicable stock option agreement
by delivery or written notice of exercise to the company
specifying the number of shares to be purchased. An option shall
be deemed exercised when (1) our Secretary (or other designated
official) has received written notice of such exercise in
accordance with the terms of the applicable option agreement and
(2) full payment of the aggregate option price (and, to the
extent applicable, withholding taxes) of the shares as to which
the option is exercised has been made. Fractional shares are not
to be issued upon exercise of a stock option.
Options may only be exercised to the extent that
installments thereof had become exercisable on or before the date
of termination of employment or engagement. Not less than 100
shares of common stock may be purchased upon exercise at any one
time and options must be purchased in multiples of 100, unless
the option is exercisable for fewer than this number of shares.
The Administering Body may, in its discretion, at any time
after the grant of a stock option, accelerate vesting of such
option as a whole or in part by increasing the number of shares
then purchasable. However, the Administering Body may not
increase the total number of shares subject to an option.
The option price of any option must be paid in cash;
however, the Administering Body may, in its discretion, (1) allow
exercise of options in a broker-assisted transaction in which the
exercise price is not received until after exercise and/or (2)
allow us to loan the exercise price to the participant.
Prior to the issuance of stock certificates upon exercise of
an option, the Administering Body may request certain agreements
or undertakings to assure compliance with any of the provisions
of the Plan, the applicable option agreement or any law or
regulation.
Subject to the foregoing and the other provisions of the
Plan, stock options may be exercised at such times and in such
amounts and be subject to such restrictions and other terms and
conditions, if any, as determined by the Administering Body.
Effect of Termination
Unless provided otherwise in writing (which may be entered
into at any time before or after termination of employment or
engagement of the participant), in the event of the termination
of a participant's employment or engagement, all of the
participant's unvested options shall terminate and all of the
participant's unexercised options shall expire and become
unexercisable as of the earlier of:
* the date such options would have expired in
accordance with their terms had the participant
remained employed or engaged;
* in the case of an employee participant, the date of
any "just cause" dismissal;
* in the case of an employee participant, one (1) year
after the participant's employment is terminated as
a result of death or permanent disability, and three
(3) months after the participant's employment is
terminated for any other reason; and
* in the case of a non-employee participant, three (3)
months after the participant's engagement is
terminated as a result of death or permanent
disability, and thirty (30) days after the
participant's engagement is terminated for any other
reason.
A "just cause" dismissal includes termination of
participant's employment for any of the following actions:
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* any violation by the participant of any reasonable
rule or regulation of our board, Chief Executive
Officer or the participant's superiors that result in
material damage to our business or which, after being
requested to do so in writing, the participant fails
to correct in a reasonable time;
* any willful misconduct or gross negligence by the
participant in his or her material responsibilities;
* any willful failure to perform the participant's job
as required to meet our objectives;
* any wrongful conduct of a participant that has a
material adverse impact on our business or which
constitutes a misappropriation of our assets;
* the participant's performing services for any other
person or entity that competes with us while the
participant is employed by us, without the written
approval of our Chief Executive Officer; or
* any other conduct that the Administering Body
determines constitutes a just cause dismissal.
To the extent a participant is a party to an employment
agreement with us which contains a concept similar to just
cause dismissal, the Plan provides that such concept shall also
govern the Plan for these purposes.
Non-Transferability
No options granted under the Plan may be sold, pledged
or otherwise assigned in any manner other than by will or the
laws of descent and distribution or, subject to the consent
of the Administering Body, pursuant to a qualified domestic
relations order, unless and until such options have been
exercised, and the shares underlying such option have been
issued, and all restrictions applicable to such shares have
lapsed.
Effect of Change in Control
The Plan provides that, in the event of a "Change in
Control," outstanding options, whether or not vested, shall
automatically terminate unless:
* the Plan is continued and the outstanding options
assumed;
* the outstanding options are substituted with new
awards covering the securities of a successor entity;
or
* our board has otherwise provided for:
* The acceleration of the vesting of the options;
and/or
* The cancellation of the options and their automatic
conversion into the right to receive the
consideration payable to the holders of the common
stock as a result of the Change in Control.
If the options terminate because none of the preceding
actions were provided for, then each participant shall have the
right, prior to the Change in Control event, to exercise the
participant's options to the fullest extent, including any
installments which had not previously vested.
For purposes of the Plan, "Change in Control" is defined, in
general, to mean the occurrence of any of the following events:
* any person or entity other than Wei Zhou or an
affiliated entity of Wei Zhou becomes the beneficial
owner of 50% or more of the common stock;
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* we sell all or substantially all of our assets;
* we effect a reorganization, merger or consolidation
(other than (1) a transaction in which our previous
shareholders maintain voting control of the successor
entity or (2) a transaction effected to implement our
recapitalization or reincorporation); or
* our shareholders or a court approves a plan resulting in
our liquidation.
Federal Income Tax Consequences
Incentive Stock Options. The federal income tax
consequences, in general, of the grant and exercise of an
incentive stock option under our Plan are as follows:
In general, an employee will not recognize taxable income
upon the grant or exercise of an incentive stock option and we
will not be entitled to any business expense deduction with
respect to the grant or exercise of an incentive stock option.
However, the excess of the fair market value of the stock upon
exercise of an incentive stock option and the exercise price is a
tax preference item which is taken into account in determining
whether the employee is subject to the alternative minimum tax.
* If the employee holds the shares for at least two years
after the date of grant and for at least one year after
the date of exercise, the difference, if any, between the
sales price of the shares and the exercise price of the
option will be treated as long-term capital gain or loss
upon subsequent disposition of the shares.
* If the employee disposes of the shares prior to
satisfying the holding period requirements, the employee
will recognize ordinary income at the time of the
disposition, generally in an amount equal to the excess
of the fair market value of the shares at the time the
option was exercised over the exercise price of the
option. Generally, we will be allowed a business expense
deduction to the extent an employee recognizes ordinary
income. The balance of the gain realized, if any, will be
short-term or long-term capital gain, depending upon
whether the shares have been held for at least one year
after the date of exercise
Nonqualified Stock Options. The federal income tax
consequences, in general, of the grant and exercise of an
nonqualified stock option under our Plan are as follows:
* In general, a recipient who receives a nonqualified stock
option will recognize no income at the time of the grant
of the option.
* Upon exercise of a nonqualified stock option, a
recipient will recognize ordinary income in an amount
equal to the excess of the fair market value of the
shares on the date of exercise over the exercise price of
the option. Generally, we will be entitled to a business
expense deduction in the amount and at the time the
recipient recognizes ordinary income.
* The basis in shares acquired upon exercise of a
nonqualified stock option will equal the fair market
value of such shares at the time of exercise, and the
holding period of the shares, for capital gain purposes,
will begin on the date of exercise.
Approval of Action
The affirmative vote of the holders of a majority of the
outstanding shares of common stock is required to adopt the Plan.
The board has obtained this approval through the written consent
of Wei Zhou, our Chief Executive Officer, President and a
director who owns in excess of a majority of the voting control
of our company. Thus, a meeting to approve the Plan is
unnecessary, and our board decided to forego the expense of
holding a meeting to approve this matter.
The Plan will be deemed approved by the shareholders of the
company on January 10, 2002, which is the date 20 calendar days
following the mailing of this information statement to our
shareholders.
9
CHANGE OF CONTROL
Pursuant to a Stock Purchase Agreement dated September 28,
2001 between Grayson Hand and Wei Zhou (the "Stock Purchase
Agreement"), 7,000,000 shares of our common stock held by
Mr. Hand, our former Chief Executive Officer, were sold to
Mr. Zhou in a privately negotiated transaction consummated
October 1, 2001. After this transaction, which resulted in a
change in control of Commodore Minerals, Mr. Hand held no
additional shares of our common stock.
In addition to the shares acquired from Mr. Hand pursuant to
the Stock Purchase Agreement, Mr. Zhou has also received
4,950,000 shares of our common stock directly from us in
connection with the Reorganization Agreement. Mr. Zhou was the
former controlling shareholder for Intac International Holdings
Limited. This transaction closed as of October 13, 2001. As a
result, Mr. Zhou currently owns 11,950,000 shares of our common
stock representing approximately 62.6% of the issued and
outstanding shares of capital stock of Commodore Minerals.
Pursuant to the Stock Purchase Agreement, Wei Zhou and Hans
Schuld became directors of the Company on October 12, 2001 and
the former directors, Grayson Hand and Gordon Keevil, resigned.
Apart from the transactions contemplated by the Stock Purchase
Agreement, the new directors appointed J. David Darnell as an
additional member of the Board of Directors of Commodore
Minerals.
On October 4, 2001, we retained James B. Stephens as our
Vice President-Finance and Acting Principal Financial and
Accounting Officer. He is not a full-time employee. Currently,
Mr. Stephens provides services to us on an as-needed basis
pursuant to the terms of a Consulting Services Agreement. We
have agreed with Mr. Stephens to terminate the Consulting
Agreement effective January 1, 2002.
10
MANAGEMENT
Executive Officers and Directors
The executive officers and directors and their ages are as
follows:
Name Age Position
----------------------- ----------- ---------------------
Wei Zhou............... 32 Chief Executive
Officer, President,
Secretary and
Director
James B. Stephens...... 56 Vice President-
Finance
(Acting Principal
Financial and
Accounting Officer)
Hans Schuld............ 54 Director
J. David Darnell....... 55 Director
Wei Zhou is our Chief Executive Officer, President and
Secretary. Mr. Zhou became a director on October 12, 2001.
Mr. Zhou is responsible for all of our day-to-day operations.
From January 1997 through September 27, 2001, Mr. Zhou served as
Managing Director of Tai Pan Trading GmbH, a Frankfurt, Germany-
based enterprise that distributes mobile telecommunications
equipment worldwide.
James B. Stephens became our Vice President-Finance on
October 4, 2001. He also serves as our Acting Principal Financial
and Accounting Officer. Prior to accepting an engagement with us,
Mr. Stephens acted as Project Manager for Crescent Real Estate
Equities, Ltd., a $5.0 billion public REIT, from 2000 through
2001 where he was responsible for the oversight and supervision
of specific IT infrastructure issues. From 1994 to 1999, he was
Vice President, Controller and Chief Accounting Officer for
Pacific Retail Trust, a privately held Real Estate Investment
Trust and from 1989 to 1994, he acted as an outside consultant to
various companies serving senior financial advisory roles. Prior
to that Mr. Stephens acted as Chief Accounting Officer for J.D.
Sims & Co. (1987 and 1988), Chief Financial Officer for Daseke
Commercial Properties (1986) and Chief Financial Officer for
Blaeser Development Corp. (1981-1986), each of which was engaged
in real estate development.
Hans Schuld is a retired executive from IBM. Mr. Schuld
became a director on October 12, 2001. In 1993, Mr. Schuld
accepted a position with IBM's European Headquarters serving as
Program Manager of RS6000 Supply and Demand Operations for Europe
and certain emerging countries in the Middle East and Africa.
Mr. Schuld retired from IBM in June 2000.
J. David Darnell is the Senior Vice President and Chief
Financial Office of Nucentrix Broadband Networks, Inc. (Nasdaq:
NCNX), a provider of broadband wireless Internet and multichannel
video services. Mr. Darnell became a director on October 15,
2001. From 1997 to October 2000, he served as Senior Vice
President and Chief Financial Officer of ILD Telecommunications,
Inc., a nationwide facilities-based provider of prepaid phone
services and telecommunications outsourcing services. From 1993
to 1997, Mr. Darnell was Senior Vice President, Finance and Chief
Financial Officer for SA Telecommunications, Inc., a publicly
held, full-service interexchange carrier that provided a wide
range of telecommunications services. From 1990 to 1993, Mr.
Darnell served as Chief Financial Officer of Messagephone, Inc.,
a telecommunications technology and intellectual property firm.
Before that, Mr. Darnell served as a financial executive in
several other industries, including insurance, transportation,
manufacturing and real estate.
11
Board of Directors
We currently have three directors. We anticipate increasing
the size of the board of directors to accommodate one or more
additional independent directors with appropriate industry,
financial or business backgrounds. However, no assurances can be
given that we will be successful in attracting such additional
directors. Any vacancy occurring on the board of directors
(including any vacancy caused by newly created directorships) may
be filled by the affirmative vote of a majority of the remaining
directors, although less than a quorum, or by the sole remaining
director.
Our directors presently serve without compensation, but are
entitled to reimbursement for reasonable and necessary expenses
incurred on our behalf. Our bylaws specifically grant our board
of directors with the necessary authority to fix the compensation
of the directors. Notwithstanding the foregoing, we have entered
into a Consulting Services Agreement with Mr. Darnell, one of our
directors, pursuant to which he will provide certain financial
and strategic services to us outside his role as a director.
Either Mr. Darnell or the company can terminate the Consulting
Services Agreement upon 30 days advance written notice.
Employment Agreements; Executive Compensation
On October 16, 2001, we entered into an employment agreement
with Wei Zhou to serve as our Chief Executive Officer and
President. The agreement is effective through October 16, 2004
and will automatically renew for successive one-year periods.
Under the agreement, Mr. Zhou receives a base salary of $120,000
per year. In addition, Mr. Zhou is entitled to receive an annual
bonus at the discretion of the board of directors.
The agreement with Mr. Zhou may be terminated by us at any
time for cause. However, if his employment is terminated by us
without cause (as such term is defined in the employment
agreement) then, we are obligated to pay Mr. Zhou an amount equal
to the greater of (a) all amounts that would have been paid had
he remained through the then-existing term or (b) an amount equal
to 12 months base salary.
If Mr. Zhou is terminated for cause, by mutual agreement, or
upon death or disability, he will be paid only through the date
of termination.
No other employee of the company receives an annual salary
of more than $100,000.
Mr. Stephens, our Vice President-Finance and Acting
Principal Financial and Accounting Officer, is not a full-time
employee. Currently, he provides services to us on an as-needed
basis pursuant to the terms of a Consulting Services Agreement.
Pursuant to the agreement, Mr. Stephens has agreed to provide us
with as much time as is necessary to assist us with accounting
and finance issues until December 31, 2001. We have agreed with
Mr. Stephens to terminate the Consulting Agreement effective
January 1, 2002.
Mr. Hand, our Chief Executive Officer from inception through
October 12, 2001, did not receive any salary or bonus in
connection with the provision of services to us in such capacity.
We have never granted stock options to any of our executive
officers, employees or others, including under the 2001 Long Term
Incentive Plan.
12
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information with respect to
the beneficial ownership of our common stock as of December 18,
2001:
Number of shares Percentage of
Person or group beneficially owned Ownership
----------------------- ------------------ --------------
Executive Officers and Directors:
Wei Zhou............................. 11,950,000 62.6%
James Stephens....................... 0 0
Hans Schuld.......................... 0 0
J. David Darnell..................... 0 0
All Executive Officers and Directors
as a Group (4 persons)............... 11,950,000 62.6%
Unless otherwise noted, the foregoing individuals have sole
voting and investment control with respect to the shares
beneficially owned by them. The address of each executive
officer and director is c/o INTAC International, Unit 1809,
18/F., Modern Warehouse, 6 Shing Yip Street, Kwun Tong, Kowloon,
Hong Kong. We have calculated the percentages using 19,089,455
shares of common stock outstanding as of December 18, 2001.
ADDITIONAL INFORMATION
PLEASE READ THIS ENTIRE DOCUMENT. Further information is
available by request or can be accessed on the Internet. We are
subject to the informational requirements of the Exchange Act,
and in accordance therewith, file annual and quarterly reports,
proxy statements and other information with the SEC. Reports,
proxy statements and other information we file can be accessed
electronically by means of the SEC's home page on the Internet at
http://www.sec.gov or at other Internet sites such as
http://www.freeedgar.com. A copy of any public filing is also
available, at no charge, by contacting James B. Stephens at
972/867-9173.
By Order of the Board of Directors,
/s/ Wei Zhou
-----------------------------------
Wei Zhou
Kowloon, Hong Kong
December 21, 2001
EXHIBIT "A"
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
COMMODORE MINERALS, INC.
Commodore Minerals, Inc., a corporation organized under the
laws of the State of Nevada on September 20, 2000, hereby amends
and restates its Articles of Incorporation pursuant to the
provisions of Nevada Revised Statutes Sections 78.385, 78.390 and
78.403.1.
The Articles of Incorporation of the Corporation are hereby
amended and restated as follows:
ARTICLE I
NAME
The name of the Corporation is INTAC International, Inc.
ARTICLE II
PURPOSE AND POWERS
The purpose for which the Corporation is organized is to
engage in any lawful activity except banking and insurance
operations.
ARTICLE III
AUTHORIZED CAPITAL
The Corporation shall have the authority to issue a total of
110,000,000 shares, consisting of (A) One Hundred Million
(100,000,000) shares of common stock, par value $0.001 per share
(the "Common Stock") and (B) Ten Million (10,000,000) shares of
preferred stock, par value $0.001 per share (the "Preferred
Stock").
Authority is hereby expressly vested in the Board of
Directors to establish and authorize the issuance of the
Preferred Stock from time to time in one or more series, and with
respect to each series of the Preferred Stock, to fix and
determine by resolution or resolutions, in the manner provided
for by law, the number of shares to constitute the series, the
designation thereof and, subject to the provisions of the Nevada
General Corporation Act, as amended, the rights and preferences
of the shares of any series so established, including:
(1) the rate of dividend payable with respect to shares of
such series and the dates, terms and other conditions
on which such dividends shall be payable;
(2) the nature of the dividend payable with respect to
shares of such series as cumulative, noncumulative or
partially cumulative;
(3) the price at and the terms and conditions on which
shares may be redeemed;
(4) the amount payable upon shares in the event of
involuntary liquidation;
A-1
(5) the amount payable upon shares in the event of
voluntary liquidation;
(6) sinking fund provisions for the redemption or purchase
of shares;
(7) the terms and conditions on which shares may be
converted, if the shares of any series are issued with
the privilege of conversion;
(8) voting rights;
(9) repurchase obligations of the Corporation with respect
to the shares of each series; and
(10) any other right, preference, or limitation with respect
to shares of such series.
Each series of the Preferred Stock may vary from any other
series of Preferred Stock in any or all of the foregoing
respects. The Board of Directors may decrease the number of
shares designated for any existing series of the Preferred Stock;
provided, however, that the Board of Directors may not decrease
the number of shares within a series below the number of shares
within such series that is then issued.
Each share of the Preferred Stock within an individual
series shall be identical in all respects with the other shares
of such series, except as to the date, if any, from which
dividends thereon shall accumulate and other details which
because of the passage of time are required to be made in order
for the substantive rights of the holders of the shares of such
series to be identical.
ARTICLE IV
INDEMNIFICATION
The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, including an action
by or in the right of the Corporation, by reason of the fact that
he or she is or was a director or officer of the Corporation, or
is or was serving at the request of the Corporation as a director
or officer of another corporation, partnership, joint venture,
trust, or other enterprise, against expenses (including
attorneys' fees), judgments, fines, and amounts paid in
settlement actually and reasonably incurred by him or her in
connection with such action, suit, or proceeding if he or she
acted in good faith and in a manner he or she reasonably believed
to be in or not opposed to the best interests of the Corporation,
and with respect to any criminal action or proceeding, had no
reasonable cause to believe his or her conduct was unlawful.
ARTICLE V
LIMITATION OF OFFICER AND DIRECTOR LIABILITY
No officer or director of the Corporation shall be
personally liable to the Corporation or its shareholders for
monetary damages for breach of fiduciary duty as an officer or
director;
A-2
provided, however, that this Article V shall not eliminate or
limit the liability of an officer or director to the extent
provided by applicable law for: (A) acts or omissions that
involve intentional misconduct, fraud, or a knowing violation of
law; or (B) authorizing the unlawful payment of any dividend or
other distribution in violation of Section 78.300 of the Nevada
Revised Statutes. The limitation of liability provided herein
shall continue after an officer or director has ceased to occupy
such position as to acts or omissions occurring during such
officer's or director's term or terms of office, and no amendment
or repeal of this Article V shall apply to or have any effect on
the liability or alleged liability of any officer or director of
the Corporation for or with respect to any acts or omissions of
such officer or director occurring prior to such amendment or
repeal.
The foregoing amendment and restatement of the Articles of
Incorporation was duly adopted by stockholders representing a
majority of the outstanding shares of the Corporation entitled to
vote thereon pursuant to shareholder action taken in lieu of a
shareholder meeting, as authorized under Nevada Revised Statutes
Section 78.320. 2
IN WITNESS WHEREOF, I have hereunto set my hand this___ day
of _________, 2001.
COMMODORE MINERALS, INC.
By:
---------------------------
Wei Zhou, President and
Chief Executive Officer
A-3
EXHIBIT "B"
=================================================================
INTAC INTERNATIONAL, INC.
2001 LONG TERM INCENTIVE PLAN
Adopted Effective November 28, 2001
=================================================================
TABLE OF CONTENTS
-----------------
ARTICLE 1. PURPOSE OF PLAN............................ 1
ARTICLE 2. EFFECTIVE DATE AND TERM OF PLAN............. 1
2.1 Term of Plan....................................... 1
2.2 Effect on Awards................................... 1
2.3 Shareholder Approval............................... 1
ARTICLE 3. SHARES SUBJECT TO PLAN...................... 1
3.1 Reserved Number of Shares.......................... 1
3.2 Source of Shares................................... 2
3.3 Availability of Unused Shares...................... 2
3.4 Adjustment Provisions.............................. 2
3.5 Substitute Awards.................................. 3
ARTICLE 4. ADMINISTRATION OF PLAN..................... 3
4.1 Administering Body................................. 3
4.2 Authority of Administering Body.................... 4
4.3 Eiligibility....................................... 5
4.4 No Liability....................................... 5
4.5 Amendments......................................... 6
4.6 Other Compensation Plans........................... 6
4.7 Plan Binding on Successors......................... 7
4.8 References to Successor Statutes, Regulations and
Rules............................................. 7
4.9 Issuances for Compensation Purposes Only .......... 7
4.10 Invalid Provisions................................ 7
4.11 Governing Law..................................... 7
ARTICLE 5. GENERAL AWARD PROVISIONS................... 7
5.1 Participation in the Plan.......................... 7
5.2 Award Agreements................................... 8
5.3 Exercise of Awards................................. 8
5.4 Payment for Awards................................. 9
5.5 No Employment or Other Continuing Rights........... 9
5.6 Restrictions Under Applicable Laws and
Regulations....................................... 10
5.7 Additional Conditions.............................. 11
5.8 No Privileges of Stock Ownership................... 12
5.9 Transferability of Awards.......................... 12
5.10 Information to Recipients......................... 13
5.11 Withholding Taxes................................. 14
5.12 Legends on Common Stock Certificates.............. 14
5.13 Effect of Termination of Employment on Awards -
Employees Only.................................. 14
5.14 Effect of Termination of Engagement on Awards -
Non-Employees Only.............................. 16
5.15 Transfer; Leave of Absence........................ 16
5.16 Limits on Awards to Certain Eligible Persons...... 17
5.17 Performance-Based Compensation.................... 17
ARTICLE 6. STOCK OPTIONS.............................. 18
6.1 Nature of Stock Options............................ 18
6.2 Option Exercise Price.............................. 18
6.3 Option Period and Vesting.......................... 18
6.4 Special Provisions Regarding Incentive Stock 18
Options........................................... 18
6.5 Restrictions....................................... 19
ARTICLE 8. REORGANIZATIONS............................ 19
8.1 Corporate Transactions Not Involving a Change in
Control........................................... 19
8.2 Corporate Transactions Involving a Change in
Control........................................... 20
ARTICLE 9. DEFINITIONS................................ 20
INTAC INTERNATIONAL, INC.
2001 LONG TERM INCENTIVE PLAN
---------------------------------------------------------
1. PURPOSE OF PLAN
The Company adopted this Plan to promote the interests of the
Company, its Affiliated Entities and their respective
stockholders by using investment interests in the Company to
attract, retain and motivate management and other persons,
including officers, directors, employees and certain consultants
of the Company and the Affiliated Entities, to encourage and
reward such persons' contributions to the performance of the
Company and to align their interests with the interests of the
Company's stockholders. Capitalized terms not otherwise defined
herein shall have the meanings ascribed to them in Article 8.
2. EFFECTIVE DATE AND TERM OF PLAN
2.1 Term of Plan. This Plan became effective as of the
Effective Date and shall continue in effect until the Expiration
Date, at which time this Plan shall automatically terminate.
2.2 Effect on Awards. Awards may be granted during the Plan
Term, but no Awards may be granted after the Plan Term.
Notwithstanding the foregoing, each Award properly granted under
this Plan during the Plan Term shall remain in effect after
termination of this Plan until such Award has been exercised,
terminated or expired, as applicable, in accordance with its
terms and the terms of this Plan.
2.3 Shareholder Approval. This Plan must be approved by the
Company's stockholders within twelve (12) months after the
Effective Date. The effectiveness of any Awards granted prior to
such shareholder approval shall be specifically subject to, and
conditioned upon, such shareholder approval.
3. SHARES SUBJECT TO PLAN
3.1 Reserved Number of Shares. The maximum number of shares of
Common Stock that may be issued pursuant to Awards granted under
this Plan shall be Two Million Five Hundred Thousand (2,500,000),
subject in any case to adjustment as set forth in Section 3.4;
and provided, further, that the maximum number of shares of
Common Stock that may be issued pursuant to Incentive Stock
Options granted under this Plan shall be Two Million Five Hundred
Thousand (2,500,000), subject in any case to adjustment as set
forth in Section 3.4.
B-1
3.2 Source of Shares. The Common Stock to be issued under this
Plan will be made available, at the discretion of the Board,
either from authorized but unissued shares of Common Stock or
from previously issued shares of Common Stock reacquired by the
Company, including without limitation, shares purchased on the
open market.
3.3 Availability of Unused Shares. Shares of Common Stock
subject to and/or underlying any unexercised, unearned or yet-to-
be acquired portions of any Award granted under this Plan that
expire, terminate or are canceled, and shares of Common Stock
issued pursuant to Awards under this Plan that are reacquired by
the Company pursuant to the terms under which such shares were
issued, will again become available for the grant of further
Awards under this Plan. Notwithstanding the provisions of this
Section 3.3, no shares of Common Stock may again be optioned,
granted or awarded if such action would cause an Incentive Stock
Option to fail to qualify as an incentive stock option under
Section 422 of the IRC or any successor statute thereto.
3.4 Adjustment Provisions.
(a) If (i) the outstanding shares of Common Stock are increased,
decreased or exchanged for a different number or kind of shares
or other securities, or if additional shares or new or different
shares or other securities are distributed in respect of such
shares of Common Stock or any stock or securities received with
respect to such Common Stock), through merger, consolidation,
sale or exchange of all or substantially all of the assets of the
Company, reorganization, recapitalization, reclassification,
stock dividend, stock split, reverse stock split, spin-off, split-
off or other distribution with respect to such shares of Common
Stock (or any stock or securities received with respect to such
Common Stock), or (ii) the value of the outstanding shares of
Common Stock is reduced by reason of an extraordinary dividend
payable in cash or property, an appropriate and proportionate
adjustment may be made in (1) the maximum number and kind of
shares or securities available for issuance under this Plan, (2)
the number and kind of shares or other securities that can be
granted to any one individual Recipient under his or her Awards,
(3) the number and kind of shares or other securities subject to
then outstanding Awards under this Plan, and/or (4) the price for
each share or other unit of any other securities subject to then
outstanding Awards under this Plan.
(b) No fractional interests will be issued under this Plan
resulting from any adjustments, but the Administering Body, in
its sole discretion, may make a cash payment in lieu of any
fractional shares of Common Stock or other securities issuable as
a result of such adjustments.
(c) Any adjustment pursuant to this Section 3.4 shall be made by
the Administering Body, in its discretion, to preserve the
benefits or potential benefits intended to be made available
under this Plan or with respect to any outstanding Awards or
otherwise necessary to reflect any capital change or other event
described in Section
B-2
3.4(a). The determination made by the Administering
Body with respect to the foregoing shall be final, binding
and conclusive upon all persons and entities.
(d) The grant of Awards pursuant to this Plan shall not affect
in any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve,
liquidate or sell, or transfer all or any part of its business or
assets or to engage in any other corporate transaction.
(e) No adjustment to the terms of an Incentive Stock Option
shall be made if such adjustment would cause such Incentive Stock
Option to lose its status as an incentive stock option under the
provisions of the IRC, unless the Administering Body determines
otherwise.
3.5 Substitute Awards. The Administering Body may grant Awards
under this Plan in substitution for stock and stock-based awards
held by employees of another corporation who become employees of
the Company or an Affiliated Entity as a result of a merger,
consolidation or other business combination of the employing
corporation with the Company or an Affiliated Entity or the
acquisition by the Company or an Affiliated Entity of property or
stock of the employing corporation. The Administering Body may
direct that the substitute Awards be granted on such terms and
conditions as the Administering Body considers appropriate in the
circumstances.
4. ADMINISTRATION OF PLAN
4.1 Administering Body.
(a) This Plan shall be administered by the Board; provided,
however, that if the Board appoints a Stock Plan Committee
pursuant to Section 4.1(b) herein, this Plan shall be
administered by the Stock Plan Committee, subject to the right of
the Board to exercise, at any time and from time to time, any and
all of the duties and responsibilities of the Stock Plan
Committee as the Administering Body, including, but not limited
to, establishing procedures to be followed by the Stock Plan
Committee; provided further, however, that the Board shall not
exercise any authority regarding matters which under applicable
law, rule or regulation, including, without limitation, any
exemptive rule under Section 16 of the Exchange Act (including
Rule 16b-3) or IRC Section 162(m), are required to be determined
in the sole discretion of the Stock Plan Committee.
(b)
(i) The Board in its sole discretion may from time to
time appoint a Stock Plan Committee of not less than
two (2) Board members to administer this Plan. The
Board may from
B-3
time to time increase or decrease (but not below two (2))
the number of members of the Stock Plan Committee,
remove from membership on the Stock Plan Committee all
or any portion of its members, and/or appoint such
person or persons as it desires to fill any vacancy
existing on the Stock Plan Committee, whether caused by
removal, resignation or otherwise. The Board may
disband the Stock Plan Committee at any time and
thereby revest in the Board the administration of this
Plan.
(ii) Notwithstanding the foregoing provisions of
Section 4.1(b)(i) to the contrary, so long as the
Company remains an Exchange Act Registered Company and
if the Company has not, by action of the Board, elected
to opt out of the provisions of this Section
4.1(b)(ii), (1) the Board shall appoint the Stock Plan
Committee, (2) this Plan shall be administered by the
Stock Plan Committee and (3) each member of the Stock
Plan Committee shall be a Non-employee Director, and,
in addition, if Awards are to be made to persons
subject to Section 162(m) of the IRC and such Awards
are intended to constitute Performance-Based
Compensation, then each member of the Stock Plan
Committee shall, in addition to being a Non-employee
Director, be an Outside Director.
(iii) The Stock Plan Committee shall report to the
Board the names of Eligible Persons granted Awards, the
precise type of Award granted, the number of shares of
Common Stock issuable pursuant to such Award, if any,
and the terms and conditions of each such Award.
4.2 Authority of Administering Body.
(a) Subject to the express provisions of this Plan, the
Administering Body shall have the power to interpret and construe
this Plan and any agreements or other documents defining the
rights and obligations of the Company or any Affiliated Entity
and such Eligible Persons who have been granted Awards hereunder
and thereunder, to determine all questions arising hereunder and
thereunder, to adopt and amend such rules and regulations for the
administration hereof and thereof as it may deem desirable to
correct any errors, supply any omissions and reconcile any
inconsistencies in this Plan and/or any Award Agreement or any
other instrument relating to any Award, and to otherwise carry
out the terms of this Plan and such agreements and other
documents. Such interpretations and constructions by the
Administering Body of any provisions of this Plan or of any
Award, as well as any other decisions, actions or inactions of
the Administering Body relating to this Plan, any Award or any
Award Agreement, shall be within the absolute discretion of the
Administering Body (subject only to the express terms of this
Plan and the Award Agreement and all applicable laws, regulations
and rules) shall be final, conclusive and binding upon all
persons and entities.
(b) Subject to the express provisions of this Plan, the
Administering Body may from time to time, in its discretion,
select the Eligible Persons to whom, and the time or times at
which, such Awards shall be granted; the nature of each Award;
the number of shares of Common Stock that comprise or underlie
each Award; the period for the
B-4
purchase or exercise of each Award, as applicable, the
Performance Criteria applicable to the Award, if any, and
such other terms and conditions applicable to each
individual Award as the Administering Body shall determine.
Subject to Section 5.16(a), the Administering Body may
grant, at any time, new Awards to an Eligible Person who has
previously received Awards whether such prior Awards are
still outstanding, have previously been canceled, disposed
of or exercised as a whole or in part, as applicable, or are
canceled in connection with the issuance of new Awards. The
Administering Body may grant Awards singly, in combination
or in tandem with other Awards, as it determines in its
discretion. Subject to Section 5.16(a), any and all terms
and conditions of the Awards, including, without limitation,
the purchase or exercise price, may be established by the
Administering Body without regard to existing Awards.
(c) Any action of the Administering Body with respect to the
administration of this Plan shall be taken pursuant to a majority
vote of the authorized number of members of the Administering
Body or by the unanimous written consent of its members;
provided, however, that (i) if the Administering Body is the
Stock Plan Committee and consists of two (2) members, then
actions of the Administering Body must be unanimous and (ii) if
the Administering Body is the Board, actions taken at a meeting
of the Board shall be valid if approved by directors constituting
a majority of the required quorum for such meeting.
(d) Except to the extent prohibited by applicable law,
including, without limitation, the requirements applicable under
IRC Section 162(m) to any Award intended to be Performance-Based
Compensation, or the requirements for any Award granted to an
officer of the Company or a Director to be covered by any
exemptive rule under Section 16 of the Exchange Act (including
Rule 16b-3), or the rules of a stock exchange or automated
quotation system then listing shares of Common Stock, the
Administering Body may, in its discretion, allocate all or any
portion of its responsibilities and powers under this Plan to any
one or more of its members and/or delegate all or any part of its
responsibilities and powers under this Plan to any person or
persons selected by it; provided, however, that the Administering
Body may not delegate its authority to correct errors, omissions
or inconsistencies in this Plan. Any such authority delegated or
allocated by the Administering Body under this Section 4.2(d)
shall be exercised in accordance with the terms and conditions of
this Plan and any rules, regulations or administrative guidelines
that may from time to time be established by the Administering
Body, and any such allocation or delegation may be revoked by the
Administering Body at any time.
4.3 Eligibility. Only Eligible Persons shall be eligible to
receive Awards under this Plan.
4.4 No Liability. No member of the Board or the Stock Plan
Committee or any designee thereof will be liable for any action
or inaction with respect to this Plan or any Award or
B-5
any transaction arising under this Plan or any Award, except in
circumstances constituting bad faith or willful misconduct of
such member.
4.5 Amendments.
(a) The Administering Body may, insofar as permitted by
applicable law, rule or regulation, from time to time suspend or
discontinue this Plan or revise or amend it in any respect
whatsoever, and this Plan as so revised or amended will govern
all Awards hereunder, including those granted before such
revision or amendment; provided, however, that, except as
otherwise provided by this Plan, no such revision or amendment
shall materially impair or diminish any rights or obligations
under any Award previously granted under this Plan, without the
written consent of the Recipient. Without limiting the
generality of the foregoing, the Administering Body is authorized
to amend this Plan to comply with or take advantage of amendments
to applicable laws, rules or regulations, including amendments to
the Securities Act, Exchange Act or the IRC or any rules or
regulations promulgated thereunder. No such revision or
amendment of this Plan shall be made without first obtaining
approval of the stockholders of the Company to the extent such
approval is required by (i) applicable law, rule or regulation,
or (ii) the requirements of any stock exchange or automated
quotation system then listing the shares of Common Stock or any
applicable requirements related to Incentive Stock Options, for
exemption from IRC Section 162(m) or the applicable requirements
of Rule 16b-3.
(b) The Administering Body may amend the terms and conditions of
an Award previously granted under this Plan, including any Award
Agreement, retroactively or prospectively, provided that no such
amendment shall materially impair or diminish any rights or
obligations of a Recipient under such Award without such
Recipient's written consent. Without limiting the generality of
the foregoing, the Administering Body may, in its discretion, at
any time and from time to time after the grant of any Award (i)
accelerate or extend the vesting or exercise period, or lapse of
restrictions, applicable to any Award in whole or in part, (ii)
adjust or reduce the purchase or exercise price, as applicable,
of Awards held by such Recipient by cancellation of such Awards
and granting of Awards at lower purchase or exercise prices or by
modification, extension or renewal of such Awards, and (iii)
reduce or otherwise modify the Performance Criteria applicable to
any Award. In the case of Incentive Stock Options, Recipients
acknowledge that extensions of the exercise period and other
modifications may result in the loss of the favorable tax
treatment afforded Incentive Stock Options under Section 422 of
the IRC.
4.6 Other Compensation Plans. The adoption of this Plan shall
not affect any other stock option, securities purchase, incentive
or other compensation plans in effect for the Company or an
Affiliated Entity, and this Plan shall not preclude the Company
or an Affiliated Entity from establishing any other forms of
incentive or other compensation for Employees, Directors,
Consultants or others, whether or not approved by stockholders of
the Company.
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4.7 Plan Binding on Successors. This Plan shall be binding upon
the successors and assigns of the Company.
4.8 References to Successor Statutes, Regulations and Rules.
Any reference in this Plan to a particular statute, regulation or
rule shall also refer to any successor provision of such statute,
regulation or rule.
4.9 Issuances for Compensation Purposes Only. This Plan
constitutes an "employee benefit plan" as defined in Rule 405
promulgated under the Securities Act. Awards to eligible
Employees or Directors shall be granted for any lawful
consideration, including compensation for services rendered,
promissory notes or otherwise. Awards to eligible Consultants
shall be granted only in exchange for bona fide services rendered
by such Consultants and such services must not be in connection
with the offer and sale of securities in a capital-raising
transaction.
4.10 Invalid Provisions. In the event that any provision of this
Plan is found to be invalid, illegal or otherwise unenforceable
under any applicable law, such invalidity, illegality or
unenforceability shall not be construed as rendering any other
provisions contained herein invalid, illegal or unenforceable,
and all such other provisions shall be given full force and
effect to the same extent as though the invalid, illegal and
unenforceable provision were not contained herein.
4.11 Governing Law. This Plan and each Award Agreement shall be
governed by and interpreted in accordance with the internal laws
of the state of incorporation of the Company, as it may be from
time to time, without giving effect to the principles of the
conflicts of laws thereof.
5. GENERAL AWARD PROVISIONS
5.1 Participation in the Plan.
(a) A person shall be eligible to receive Award grants under
this Plan if, at the time of the grant of such Award, such person
is an Eligible Person.
(b) Incentive Stock Options may be granted only to Employees
who, at the date of granting of such Incentive Stock Options, are
Employees of the Company or a Parent Corporation or a Subsidiary
Corporation, and otherwise meet the employment requirements of
Section 422 of the IRC, or a similar statute governing Incentive
Stock Options.
(c) Notwithstanding anything to the contrary herein, the
Administering Body may, in its discretion, in order to fulfill
the purposes of this Plan, modify grants of Awards to Recipients
who are foreign nationals or employed outside of the United
States to recognize differences in applicable law, tax policy or
local custom.
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5.2 Award Agreements.
(a) Each Award granted under this Plan shall be evidenced by an
Award Agreement duly executed on behalf of the Company and by the
Recipient or, in the Administering Body's discretion, a
confirming memorandum issued by the Company to the Recipient,
setting forth such terms and conditions applicable to such Award
as the Administering Body may in its discretion determine. Award
Agreements may but need not be identical and shall comply with
and be subject to the terms and conditions of this Plan, a copy
of which shall be provided to each Recipient and incorporated by
reference into each Award Agreement. Any Award Agreement may
contain such other terms, provisions and conditions not
inconsistent with this Plan as may be determined by the
Administering Body.
(b) In case of any conflict between this Plan and any Award
Agreement, this Plan shall control except as specifically
provided in the Award Agreement.
(c) In case of any conflict between this Plan and any Award
Agreement, on the one hand, and any Employment Agreement between
a Recipient and either the Company and/or an Affiliated Entity,
on the other hand, the terms and conditions of the Employment
Agreement with such Recipient shall apply with respect to those
items specifically addressed in the Employment Agreement.
(d) In consideration of the granting of an Award under this Plan
and if requested by the Company, the Recipient shall agree, in
the Award Agreement, to remain in the employ of (or to consult
for or to serve as a Director of, as applicable) the Company or
any Affiliated Entity for a period of at least one (1) year (or
such shorter period as may be fixed in the Award Agreement or by
action of the Administering Body following grant of the Award)
after the Award is granted (or, in the case of a Director, until
the next annual meeting of stockholders of the Company).
5.3 Exercise of Awards. No Award granted hereunder shall be
issuable or exercisable, except in respect of whole shares, and
fractional share interests shall be disregarded. Not less than
100 shares of Common Stock (or such other amount as is set forth
in the applicable Award Agreement) may be purchased or issued at
one time upon exercise of an Award, and Awards must be exercised,
issued or purchased, as applicable, in multiples of 100 shares,
unless the number of shares purchased is the total number of
shares at the time available under the terms of the Award. An
Award shall be deemed to be claimed or exercised when the
Secretary or other official of the Company designated by the
Administering Body receives appropriate written notice, on such
form acceptable to the Administering Body, from the Recipient,
together with payment of the applicable purchase or exercise
price made in accordance with the Award Agreement and any amounts
required under Section 5.11 of this Plan. Notwithstanding any
other provision of this Plan, the Administering Body may impose,
by rule and/or in Award Agreements, such conditions upon the
exercise of Awards (including, without limitation, conditions
limiting the time of exercise to specified periods) as may be
required to satisfy
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applicable regulatory requirements, including, without
limitation, Rule 16b-3 and Rule 10b-5 under the Exchange Act or
any other applicable law, regulation or rule, including, without
limitation, any other applicable requirements under the IRC, or
the regulations or rules promulgated thereunder.
5.4 Payment for Awards.
(a) Awards requiring payment of a purchase or exercise price
shall be payable upon the exercise or purchase of such Award by
delivery of legal tender of the United States or payment of such
other consideration as the Administering Body may from time to
time deem acceptable in any particular instance, including
consideration pursuant to subparagraphs (b) and (c) of this
Section 5.4.
(b) The Company may, in the discretion of the Administering
Body, assist any Recipient (including, without limitation, any
Employee, Director or Consultant) in the payment of the exercise
price or other amounts payable in connection with the receipt or
exercise of such Award, by lending such amounts to such person on
such terms and at such rates of interest and upon such security
(if any) as shall be approved by the Administering Body.
(c) In the discretion of the Administering Body, and subject to
such limitations or conditions as it may prescribe, if permitted
by applicable law, (i) payments for purchase or exercise of
Awards may be by matured capital stock of the Company (i.e.,
capital stock owned longer than six (6) months by the person
delivering such capital stock or by such person and his or her
spouse jointly) delivered in transfer to the Company by or on
behalf of the person exercising or purchasing the Award and duly
endorsed in blank or accompanied by stock powers duly endorsed in
blank, with signatures guaranteed in accordance with the Exchange
Act if required by the Administering Body (valued at Fair Market
Value as of the exercise or purchase date), or such other
consideration as the Administering Body may from time to time in
the exercise of its discretion deem acceptable in any particular
instance; (ii) the Administering Body may allow the exercise of
Stock Options in a broker-assisted or similar transaction in
which the exercise price is not received by the Company until
promptly after exercise, and/or (iii) the Administering Body may
allow the Company to loan the applicable purchase or exercise
price to the Recipient, if the purchase or exercise will be
followed by a prompt sale of some or all of the underlying shares
and a portion of the sale proceeds is dedicated to full payment
of the purchase or exercise price and amounts required pursuant
to Section 5.11 of this Plan.
5.5 No Employment or Other Continuing Rights. Nothing contained
in this Plan (or in any Award Agreement or in any other agreement
or document related to this Plan or to Awards granted hereunder)
shall confer upon (a) any Eligible Person or Recipient any right
to continue in the employ (or other business relationship) of the
Company or any Affiliated Entity or constitute any contract or
agreement of employment or engagement, or interfere in any way
with the right of the Company or any Affiliated Entity to reduce
such person's compensation or
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other benefits or to terminate the employment or engagement of
such Eligible Person or Recipient, with or without cause; or
(b) any Recipient any right to exercise or claim his or her Award
otherwise than in accordance with the express terms and
conditions of his or her Award Agreement and this Plan. Except
as expressly provided in this Plan or in any Award Agreement
pursuant to this Plan, the Company and any Affiliated Entity, as
applicable, shall have the right to deal with each Recipient in
the same manner as if this Plan and any such Award Agreement did
not exist, including, without limitation, with respect to all
matters related to the hiring, retention, discharge, compensation
and conditions of the employment or engagement of the Recipient.
Any questions as to whether and when there has been a termination
of a Recipient's employment or engagement, the reason (if any)
for such termination, and/or the consequences thereof under the
terms of this Plan or any statement evidencing the grant of
Awards pursuant to this Plan shall be determined by the
Administering Body, and the Administering Body's determination
thereof shall be final, conclusive and binding upon all persons
and entities.
5.6 Restrictions Under Applicable Laws and Regulations.
(a) All Awards granted under this Plan shall be subject to the
requirement that, if at any time the Company shall determine, in
its discretion, that the listing, registration or qualification
of the shares subject to any such Award granted under this Plan
upon any securities exchange or under any federal, state or
foreign law, or the consent or approval of any government
regulatory body, is necessary or desirable as a condition of, or
in connection with, the granting of such Awards or the issuance,
if any, or purchase of shares in connection therewith, such
Awards may not be granted or exercised as a whole or in part
unless and until such listing, registration, qualification,
consent or approval shall have been effected or obtained free of
any conditions not acceptable to the Administering Body. During
the term of this Plan, the Company will use reasonable efforts to
seek to obtain from the appropriate regulatory agencies any
requisite qualifications, consents, approvals or authorizations
in order to issue and sell such number of shares of its Common
Stock as shall be sufficient to satisfy the requirements of this
Plan. The inability of the Company to obtain from any such
regulatory agency having jurisdiction thereof the qualifications,
consents, approvals or authorizations deemed by the Company to be
necessary for the lawful issuance and sale of any shares of its
Common Stock hereunder shall relieve the Company of any liability
in respect of the nonissuance or sale of such stock as to which
such requisite qualification, consent, approval or authorization
shall not have been obtained.
(b) The Company shall be under no obligation to register or
qualify the issuance of Awards or underlying shares of Common
Stock under the Securities Act or applicable state securities
laws. Unless the shares of Common Stock applicable to any such
Award have been registered under the Securities Act and qualified
or registered under applicable state securities laws, the Company
shall be under no obligation to issue any shares of Common Stock
covered by any Award unless the Award and underlying shares of
Common Stock, as applicable, may be issued pursuant to applicable
exemptions from such registration or qualification requirements.
In connection
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with any such exempt issuance, the Administering Body may
require the Recipient to provide a written representation
and undertaking to the Company, satisfactory in form and
scope to the Administering Body and upon which the Company
may reasonably rely, that such Recipient is acquiring such
shares of Common Stock for his or her own account, as an
investment and not with a view to, or for sale in connection
with, the distribution of any such shares of Common Stock,
and that such person will make no transfer of the same
except in compliance with any rules and regulations in force
at the time of such transfer under the Securities Act and
other applicable law, and that if shares of Common Stock are
issued under this Plan without such registration, a legend
to this effect (together with any other legends deemed
appropriate by the Administering Body) may be endorsed upon
the certificates evidencing the shares of Common Stock so
issued. The Administering Body may also order its transfer
agent to stop transfers of such shares. The Administering
Body may also require the Recipient to provide the Company
such information and other documents as the Administering
Body may request in order to satisfy the Administering Body
as to the investment sophistication and experience of the
Recipient and as to any other conditions for compliance with
any such exemptions from registration or qualification.
5.7 Additional Conditions. The grant and/or exercise of an
Award and the issuance of shares in connection with the exercise
of an Award may also be conditioned upon or subject to such other
provisions (whether or not applicable to any other Award or
Eligible Person) as the Administering Body, in its sole
discretion, determines appropriate, in accordance with this Plan
and the Award Agreement, including, without limitation, (a)
provisions to assist the Recipient in financing the purchase of
Common Stock issuable as a result of such Award, (b) provisions
for the forfeiture of or restrictions on resale or other
disposition of shares of Common Stock acquired under any Award,
(c) provisions giving the Company the right to repurchase shares
of Common Stock acquired under any Award in the event the
Recipient elects to dispose of such shares, (d) provisions to
comply with federal and state securities laws and federal, state
or foreign income or employment tax withholding requirements,
(e) provisions conditioned upon the declaration of effectiveness
by the SEC of a registration statement relating to a primary
offering of the Common Stock, filed by the Company with the SEC
under the Securities Act, (f) provisions conditioned upon the
satisfaction of withholding tax or other withholding liabilities,
(g) provisions conditioned upon the listing, registration or
qualification of any to-be-issued shares upon any securities
exchange, any NASDAQ or other trading or quotation system or
under any state or federal law, (h) provisions conditioned upon
the consent or approval of any regulatory body, (i) provisions
conditions upon the execution of a lock-up agreement with one or
more prospective underwriters, or (j) provisions conditioned upon
the execution of a buy-sell or stockholders agreement with other
stockholders of the Company. The Administering Body shall, in
its sole discretion, determine whether any one or more of these
conditions is necessary or desirable to be satisfied in
connection with the exercise of an Award or the delivery or
purchase of shares pursuant to the exercise of an Award. If the
Administering Body determines that any one or more of the
foregoing conditions must be satisfied, the exercise of an Award
shall not be
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effective unless and until such condition shall have been
satisfied free of any conditions not acceptable to the
Administering Body in its sole discretion.
5.8 No Privileges of Stock Ownership. Except as otherwise set
forth herein, a Recipient shall have no rights as a shareholder
with respect to any shares issuable or issued in connection with
an Award until the date of the exercise of the Award in
accordance with the Award Agreement and this Plan, and the
receipt by the Company of all amounts payable in connection with
the purchase or exercise, as applicable, of the Award, the
satisfaction or waiver of all applicable performance goals and
performance by the Recipient of all conditions and obligations
applicable to the Award, in accordance with this Plan and the
applicable Award Agreement. Status as an Eligible Person shall
not be construed as a commitment that any Award will be granted
under this Plan to an Eligible Person or to Eligible Persons
generally. No person shall have any right, title or interest in
any fund or in any specific asset (including shares of capital
stock) of the Company by reason of any Award granted hereunder.
Neither this Plan (nor any documents related hereto) nor any
action taken pursuant hereto (or thereto) shall be construed to
create a trust of any kind or a fiduciary relationship between
the Company and any Person. To the extent that any Person
acquires any right with respect to Awards hereunder, such right
shall be no greater than the right of any unsecured general
creditor of the Company.
5.9 Transferability of Awards.
(a) Except as otherwise provided by this Section 5.9 or by the
Administering Body, no Award under this Plan may be sold,
pledged, assigned, transferred, encumbered, alienated,
hypothecated or otherwise disposed of (whether voluntarily or
involuntarily or by operation of law by judgment, levy,
attachment, garnishment or any other legal or equitable
proceedings (including bankruptcy)) in any manner other than by
will or the laws of descent and distribution or, subject to the
consent of the Administering Body, pursuant to a DRO, unless and
until such Award has been exercised, if applicable, and the
shares of Common Stock underlying such Award have been issued,
and all restrictions applicable to such shares have lapsed, and
no Award or interest or right therein shall be liable for the
debts, contracts, liabilities or contractual obligations of the
Recipient thereof. Any attempted disposition of an Award or any
interest therein shall be null and void and of no effect, except
to the extent that such disposition is permitted by the preceding
sentence.
(b) Except as otherwise provided by the Administering Body,
during the lifetime of a Recipient, only he or his court
appointed guardian may exercise an Award (or any portion thereof)
granted to him under this Plan, unless it has been transferred in
accordance with paragraph (c) of this Section 5.9 or, with the
consent of the Administering Body, pursuant to a DRO. After the
death of a Recipient, any exercisable or vested but unpaid
portion of an Award may, prior to the time when such portion
becomes unexercisable or is terminated or expires under this Plan
or the applicable Award Agreement, be exercised by or paid to the
beneficiary most recently named by such Recipient in a written
designation thereof filed with the Company, to the extent
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permitted by the Recipient's Award Agreement, or, in the
absence of a validly designated beneficiary, his or her
personal representative or by any person empowered to do so
under the deceased Recipient's will or under the then
applicable laws of descent and distribution. In the event
any Award is to be exercised by, or paid to, the executors,
administrators, heirs or distributees of the estate of a
deceased Recipient, or such Recipient's beneficiary, or an
incapacitated Recipient's guardian, or the transferee of
such Award, in any case pursuant to the terms and conditions
of this Plan and the applicable Award Agreement, and in
accordance with such terms and conditions as may be
specified from time to time by the Administering Body, the
Company shall be under no obligation to issue shares of
Common Stock or make any payment under such Award unless and
until the Administering Body is satisfied that the person or
persons exercising or to receive payment under such Award is
the duly appointed legal representative of the deceased
Recipient's estate or the proper legatee or distributees
thereof.
(c) The Administering Body may, in its discretion, permit the
transfer of an Award to, exercise of an Award by, or payment of
an Award to, a person other than the Recipient who received the
grant of such Award in accordance with and/or under the Award
Agreement and such terms and conditions as the Administering Body
may specify from time to time.
(d) Notwithstanding the foregoing, no Stock Option owned by a
Recipient subject to Section 16 of the Exchange Act may be
assigned or transferred in any manner inconsistent with Rule 16b-
3, and Incentive Stock Options (or other Stock Options subject to
transfer restrictions under the IRC) may not be assigned or
transferred if such assignment or transfer would cause such an
Incentive Stock Option to fail to qualify under Section 422 of
the IRC (or any comparable or successor provision) or the
regulations thereunder.
5.10 Information to Recipients.
(a) The Administering Body in its sole discretion shall
determine what, if any, financial and other information shall be
provided to Recipients and when such financial and other
information shall be provided after giving consideration to
applicable federal, state and foreign laws, rules and
regulations, including, without limitation, applicable federal,
state and foreign securities laws, rules and regulations.
(b) The furnishing of financial and other information that is
confidential to the Company shall be subject to the Recipient's
agreement that the Recipient shall maintain the confidentiality
of such financial and other information, shall not disclose such
information to third parties, and shall not use the information
for any purpose other than evaluating an investment in the
Company's securities under this Plan. The Administering Body may
impose other restrictions on the access to and use of such
confidential information and may require a Recipient to
acknowledge the Recipient's obligations
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under this Section 5.10(b) (which acknowledgment shall not
be a condition to the Recipient's obligations under this
Section 5.10(b)).
5.11 Withholding Taxes. Whenever the granting, vesting, exercise
or payment of any Award granted under this Plan, or the transfer
of any shares issued upon exercise of any Award, gives rise to
tax or tax withholding liabilities or obligations, the
Administering Body shall have the right, as a condition to the
issuance of any shares of Common Stock under, or other payment
of, such Award, to require the Recipient to remit to the Company
an amount sufficient to satisfy such federal, state, local and
foreign tax requirements, and the Company or any Affiliated
Entity shall, to the extent permitted by applicable law, have the
right to deduct any such taxes from any payment of any kind
otherwise due to such Recipient. The Administering Body may, in
the exercise of its discretion, permit a Recipient to satisfy
such tax withholding requirements by (a) delivery to the Company
of Common Stock owned by such Recipient (or by such Recipient and
his or her spouse jointly) or (b) electing withholding by the
Company of a portion of the Common Stock otherwise issuable in
connection with such Recipient's Award (provided, however, that
the amount of any Common Stock so withheld shall not exceed the
amount necessary to satisfy required federal, state, local and
foreign withholding obligations using the minimum statutory
rate), to the extent permitted by applicable law and pursuant to
procedures approved by the Administering Body.
5.12 Legends on Common Stock Certificates. Each certificate
representing shares acquired as a result of any Award granted
hereunder shall be endorsed with all legends, if any, required by
applicable federal and state securities or other laws or
agreements or the Administering Body to be placed on the
certificate. The determination of which legends, if any, shall
be placed upon such certificates shall be made by the
Administering Body in its sole discretion and such decision shall
be final and binding.
5.13 Effect of Termination of Employment on Awards - Employees
Only.
(a) Termination for Just Cause Dismissal. Subject to Section
5.13(c), and except as otherwise provided in a written agreement
(including, without limitation, any Award Agreement) between the
Company and/or an Affiliated Entity and the Recipient, which may
be entered into at any time before or after termination of
employment of the Recipient, in the event of a Just Cause
Dismissal of an Employee Recipient from employment with the
Company or any Affiliated Entity, all of the Recipient's unvested
Awards shall be terminated and become void, and all of the
Recipient's unexercised Awards (whether or not vested) shall be
forfeited, expire and become void, as of the date of such Just
Cause Dismissal.
(b) Termination Other than for Just Cause Dismissal. Subject to
Section 5.13(c), and except as otherwise provided in a written
agreement (including, without limitation, any Award Agreement)
between the Company and/or an Affiliated Entity and the
Recipient, which may be entered into at any time before or after
termination of
B-14
employment, in the event of an Employee Recipient's
termination of employment with the Company or any Affiliated
Entity for:
(i) any reason other than for Just Cause Dismissal, death,
Permanent Disability or Retirement, the Recipient's unvested
and/or unexercised Awards, whether or not vested, shall expire
and become void as of the earlier of (A) the date such Awards
would have expired in accordance with their terms had the
Recipient remained employed and (B) three (3) months after the
date of such termination; or
(ii) death, Permanent Disability or Retirement, the Recipient's
unvested and/or unexercised, whether or not vested, Awards shall
expire and become void as of the earlier of (A) the date such
Awards would have expired in accordance with their terms had the
Recipient remained employed and (B) one (1) year after the date
of such termination; provided, however, that the one-year period
provided in (B) shall be three (3) months for Incentive Stock
Options following termination of employment for Retirement.
(c) Alteration of Vesting and Exercise Periods. Notwithstanding
anything to the contrary in Section 5.13(a) or Section 5.13(b),
the Administering Body may in its discretion designate shorter or
longer periods to claim or otherwise exercise Awards following a
Recipient's termination of employment with the Company or any
Affiliated Entity; provided, however, that any shorter periods
determined by the Administering Body shall be effective only if
provided for in the Award Agreement that evidences the
Recipient's Award or if such shorter period is agreed to in
writing between the Recipient and the Company. Notwithstanding
anything to the contrary herein, Awards shall be claimed, paid or
exercisable by a Recipient following such Recipient's termination
of employment with the Company or any Affiliated Entity only to
the extent that installments thereof had become exercisable or
vested on or prior to the date of such termination; and provided
further that the Administering Body may, in its discretion, elect
to accelerate the vesting or exercisability of, or lapse of
restrictions applicable to, all or any portion of any Awards that
had not become vested or exercisable on or prior to the date of
such termination, in the event of a termination of employment due
to the Recipient's death or Permanent Disability, or, except with
respect to any Award intended to qualify as Performance-Based
Compensation, in the event of Retirement or otherwise.
Furthermore, at any time prior to a Recipient's termination of
employment with the Company or any Affiliated Entity, the
Administering Body may, in its discretion, accelerate the vesting
or exercisability, or waive or, subject to the other provisions
of this Plan, amend any and all of the goals, restrictions or
conditions imposed under any Award; provided, however, no such
acceleration, waiver or amendment shall cause any Award otherwise
intended to qualify as Performance-Based Compensation to fail to
so qualify.
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5.14 Effect of Termination of Engagement on Awards - Non-
Employees Only.
(a) Termination of Engagement. Subject to Section 5.14(b), and
except as otherwise provided in a written agreement between the
Company and/or an Affiliated Entity and the Recipient, which may
be entered into at any time before or after termination of
engagement of the Recipient, in the event of the termination of
any non-Employee Recipient's engagement with the Company or any
Affiliated Entity (including any such Recipient who is a
Director, but not also an Employee or a Consultant), all of the
Recipient's unvested Awards shall be terminated and become void,
and all of the Recipient's unexercised Awards (whether or not
vested) shall be forfeited, expire and become void as of the
earlier of (i) the date such Awards would expire in accordance
with their terms had the Recipient remained engaged by the
Company or such Affiliated Entity and (ii)(A) three (3) months
after such termination as a result of death or Permanent
Disability and (B) thirty (30) days after such termination for
any other reason.
(b) Alteration of Vesting and Exercise Periods. Notwithstanding
anything to the contrary in Section 5.14(a), the Administering
Body may, in its discretion, designate shorter or longer periods
to claim or otherwise exercise Awards following a non-Employee
Recipient's termination of engagement with the Company or any
Affiliated Entity; provided, however, that any shorter periods
determined by the Administering Body shall be effective only if
provided for in the Award Agreement that evidences the
Recipient's Award or if such shorter period is agreed to in
writing by the Recipient. Notwithstanding anything to the
contrary herein, Awards shall be claimed, paid or exercisable by
a Recipient following such Recipient's termination of engagement
with the Company or any Affiliated Entity only to the extent that
the installments thereof had become exercisable or vested on or
prior to the date of such termination; and provided further that
the Administering Body may, in its discretion, elect to
accelerate the vesting or exercisability of, or lapse of
restrictions applicable to, all or any portion of any Awards that
had not become vested or exercisable on or prior to the date of
such termination. Furthermore, at any time prior to a Recipient's
termination of engagement with the Company or any Affiliated
Entity, the Administering Body may, in its discretion, accelerate
the vesting or exercisability, or waive or, subject to the other
provisions of this Plan, amend any and all of the goals,
restrictions or conditions imposed under any Award.
5.15 Transfer; Leave of Absence. For purposes of this Plan, the
transfer by a Recipient to the employment or engagement of (i)
the Company from an Affiliated Entity, (ii) from the Company to
an Affiliated Entity or (iii) from one Affiliated Entity to
another Affiliated Entity (including, with respect to
Consultants, the assignment between the Company and an Affiliated
Entity or between two Affiliated Entities, as applicable, of an
agreement pursuant to which such services are rendered) or, with
respect solely to Employees, an approved leave of absence for
military service, sickness, or for any other purpose approved by
the Company, shall not be deemed a termination of employment or
engagement of such Recipient, as the case may be; provided,
however, that a change in status of a Recipient from an Employee
to a Consultant, or to a Director who is not an Employee, shall
be considered a termination of such
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Recipient's employment with the Company or an Affiliated Entity
for purposes of this Plan and such Recipient's Awards, except to
the extent that the Administering Body determines, in its
discretion, otherwise with respect to any Award that is not an
Incentive Stock Option. In no event, however, shall an Award be
exercisable after the date such Award would expire in accordance
with its terms had the Recipient remained continuously employed
or engaged in the service of the Company or an Affiliated Entity.
Whether a Recipient's employment or service with the Company or
any Affiliated Entity has terminated, and, if so, whether such
termination constituted Just Cause Dismissal, shall be determined
by the Administering Body, in its good faith discretion, in
accordance with this Plan, and any such determination shall be
final, binding and conclusive upon all persons and entities.
5.16 Limits on Awards to Certain Eligible Persons.
(a) Limitations Applicable to IRC Section 162(m) Participants.
Notwithstanding any other provision of this Plan, in order for
the compensation attributable to Awards hereunder to qualify as
Performance-Based Compensation, no one Eligible Person shall be
granted any one or more Awards with respect to more than Two
Million Five Hundred Thousand (2,500,000) shares of Common Stock
in any one calendar year. The limitation set forth in this
Section 5.16(a) shall be subject to adjustment as provided in
Section 3.4 or Section 4.5(b) and Article 7, but only to the
extent such adjustment would not affect the status of
compensation attributable to Awards hereunder as Performance-
Based Compensation. To the extent required by Section 162(m) of
the IRC, shares of Common Stock subject to Awards which are
canceled shall continue to be counted against such limitation and
if, after the grant of an Award, the price of shares subject to
such Award is reduced and the transaction is treated as a
cancellation of the Award and a grant of a new Award, both the
Award deemed to be canceled and the Award deemed to be granted
shall be counted against such limitation.
(b) Limitations Applicable to Section 16 Persons.
Notwithstanding any other provision of this Plan, this Plan, and
any Award granted or awarded to any individual who is then
subject to Section 16 of the Exchange Act, shall be subject to
any additional limitations set forth in any applicable exemptive
rule under Section 16 of the Exchange Act (including Rule 16b-3)
that are requirements for the application of such exemptive rule.
To the extent permitted by applicable law, this Plan and Awards
granted or awarded hereunder shall be deemed amended to the
extent necessary to conform to such applicable exemptive rule.
5.17 Performance-Based Compensation. If the amount of
compensation an Eligible Person may receive under any Award is
not based solely on an increase in the value of Common Stock
after the date of grant, the Administering Body, in order to
qualify such Awards as Performance-Based Compensation, may
condition the payment, granting, vesting or exercisability or
purchase price of such Awards on the attainment of one or more
pre-established, objective performance goals that are determined
over a measurement period or periods established by the
Administering Body and relate to one or more Performance
Criteria. The
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Administering Body shall establish and administer any such
performance goals. Payment of compensation in respect of any
such Award shall not be made unless and until the Administering
Body certifies in writing that the applicable Performance
Criteria, performance goals and any other material terms of such
Award were in fact satisfied, except as otherwise provided by the
Administering Body in accordance with this Plan and the
applicable Award Agreement in the event of termination of a
Recipient's employment or service with the Company or an
Affiliated Entity due to death or Disability or in the event of a
Change in Control.
6. STOCK OPTIONS
6.1 Nature of Stock Options. Subject to the limitations
provided otherwise herein, Stock Options may be Incentive Stock
Options or Non-qualified Stock Options. Each Award Agreement
relating to a Stock Option shall state whether such Option will
be treated as an Incentive Stock Option or a Non-qualified Stock
Option.
6.2 Option Exercise Price. The exercise price for each Stock
Option shall be determined by the Administering Body as of the
date such Stock Option is granted and shall be stated in the
Award Agreement. The exercise price shall be no less than the
Fair Market Value of the Common Stock subject to the Option on
the date such option is granted; provided, however, that the
Administering Body may, in its discretion, with the consent of
the Recipient in the case of an Incentive Stock Option, amend the
terms of any Stock Option not intended to qualify as Performance-
Based Compensation to provide that the exercise price of the
shares remaining subject to the Stock Option shall be
reestablished at a price not less than 100% of the Fair Market
Value of the Common Stock on the effective date of the amendment.
6.3 Option Period and Vesting. Stock Options granted hereunder
shall vest and may be exercised as determined by the
Administering Body and stated in the Award Agreement, except that
exercise of such Stock Options after termination of the
Recipient's employment or engagement shall be subject to Section
5.13 or 5.14, as the case may be. Each Stock Option granted
hereunder and all rights or obligations thereunder shall expire
on such date as shall be determined by the Administering Body,
but not later than ten (10) years after the date the Stock Option
is granted and shall be subject to earlier termination as
provided herein or in the Award Agreement. The Administering
Body may, in its discretion at any time and from time to time
after the grant of a Stock Option, accelerate vesting of such
Stock Option as a whole or in part by increasing the number of
shares then purchasable, provided that the total number of shares
subject to such Stock Option may not be increased. Except as
otherwise provided herein, a Stock Option shall become
exercisable, as a whole or in part, on the date or dates, or upon
satisfaction of such conditions, specified by the Administering
Body and thereafter shall remain exercisable until the expiration
or earlier termination of the Stock Option.
6.4 Special Provisions Regarding Incentive Stock Options.
(a) Notwithstanding anything in this Article 6 to the contrary,
the exercise price and vesting Period of any Stock Option
intended to qualify as an Incentive Stock
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Option shall comply with the provisions of Section 422 of
the IRC and the regulations thereunder. As of the Effective
Date, such provisions require, among other matters, that
(i) the exercise price must not be less than the Fair Market
Value of the underlying stock as of the date the Incentive
Stock Option is granted, and not less than 110% of the Fair
Market Value as of such date in the case of a grant to a
Significant Shareholder; and (ii) that the Incentive Stock
Option not be exercisable after the expiration of five (5)
years from the date of grant in the case of an Incentive
Stock Option granted to a Significant Shareholder.
(b) The aggregate Fair Market Value (determined as of the
respective date or dates of grant) of the Common Stock for which
one or more Incentive Stock Options granted to any Recipient
under this Plan (or any other option plan of the Company or an
Affiliated Entity) may for the first time become exercisable as
"incentive stock options" under the IRC during any one calendar
year shall not exceed $100,000.
(c) Any Options granted as Incentive Stock Options pursuant to
this Plan that for any reason fail or cease to qualify as such
shall be treated as Non-qualified Stock Options.
6.5 Restrictions The Administering Body, in its sole and
absolute discretion, may impose such restrictions on the
ownership and transferability of the shares purchasable upon the
exercise of a Stock Option as it deems appropriate. Any such
restriction shall be set forth in the respective Award Agreement
and may be referred to on the certificates evidencing such
shares. The Recipient shall give the Company prompt notice of any
disposition of shares of Common Stock acquired by exercise of an
Incentive Stock Option within (i) two years from the date of
granting (including the date the Option is modified, extended or
renewed for purposes of Section 424(h) of the IRC) such Option to
such Recipient or (ii) one year after the transfer of such shares
to such Recipient.
7. REORGANIZATIONS
7.1 Corporate Transactions Not Involving a Change in Control.
If the Company shall consummate any Reorganization not involving
a Change in Control in which holders of shares of Common Stock
are entitled to receive in respect of such shares any securities,
cash or other consideration (including without limitation a
different number of shares of Common Stock), each Award
outstanding under this Plan shall thereafter be claimed or
exercisable, in accordance with this Plan, only for the kind and
amount of securities, cash and/or other consideration receivable
upon such Reorganization by a holder of the same number of shares
of Common Stock as are subject to that Award immediately prior to
such Reorganization, and any adjustments will be made to the
terms of the Award, and the underlying Award Agreement, in the
sole discretion of the Administering Body as it may deem
appropriate to give effect to the Reorganization.
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7.2 Corporate Transactions Involving a Change in Control. As of
the effective time and date of any Change in Control, this Plan
and any then outstanding Awards (whether or not vested) shall
automatically terminate unless (a) provision is made in writing
in connection with such transaction for the continuance of this
Plan and for the assumption of such Awards, or for the
substitution for such Awards of new grants covering the
securities of a successor entity or other party to the
transaction resulting in such Change in Control or an affiliate
thereof, with appropriate adjustments as to the number and kind
of securities and exercise prices, in which event this Plan and
such outstanding Awards shall continue or be replaced, as the
case may be, in the manner and under the terms provided by the
Administering Body and/or in any written agreement relating to
such Change in Control transaction; or (b) the Board otherwise
has provided or shall provide in writing for such adjustments as
it deems appropriate in the terms and conditions of the then-
outstanding Awards (whether or not vested), including without
limitation (i) accelerating the vesting or exercisability of
outstanding Awards and/or (ii) providing for the cancellation of
Awards and their automatic conversion into the right to receive
the securities, cash and/or other consideration that a holder of
the shares underlying such Awards would have been entitled to
receive upon consummation of such Change in Control had such
shares been issued and outstanding immediately prior to the
effective date and time of the Change in Control (net of the
appropriate option exercise prices). If, pursuant to the
foregoing provisions of this Section 7.2, this Plan and any
outstanding Awards granted hereunder shall terminate by reason of
the occurrence of a Change in Control without provision for any
of the actions described in clause (a) or (b) hereof, then any
Recipient holding outstanding Awards shall have the right, at
such time immediately prior to the consummation of the Change in
Control as the Administering Body shall designate, to convert,
claim or exercise, as applicable, the Recipient's Awards to the
full extent not theretofore converted, claimed or exercised,
including any installments which have not yet become vested or
exercisable.
8. DEFINITIONS
Capitalized terms used in this Plan and not otherwise defined
shall have the meanings set forth below:
"Administering Body" means the Board as long as no Stock Plan
Committee has been appointed and is in effect and shall mean the
Stock Plan Committee as long as the Stock Plan Committee is
appointed and in effect.
"Affiliated Entity" means any (i) any corporation or limited
liability company, other than the Company, in an unbroken chain
of corporations or limited liability companies ending with the
Company if each corporation or limited liability company owns
stock or membership interests (as applicable) possessing more
than fifty percent (50%) of the total combined voting power of
all classes of stock in one of the other corporations or limited
liability companies in such chain; (ii) any corporation, trade or
business (including, without limitation, a partnership or limited
liability company) which is more than fifty percent (50%)
controlled (whether by ownership of stock, assets or an
equivalent ownership interest or voting interest) by the Company
or another Affiliated Entity; or (iii) any other entity, approved
by the Administering Body as
B-19
an Affiliated Entity under the Plan, in which the Company or any
other Affiliated Entity has a material equity interest.
"Award" or "Awards," except where referring to a particular
category or grant under this Plan, shall include Incentive Stock
Options and Non-qualified Stock Options.
"Award Agreement" means the agreement or confirming memorandum
setting forth the terms and conditions of the Award.
"Board" means the Board of Directors of the Company.
"Change in Control" means the following and shall be deemed to
occur if any of the following events specified in clauses (a),
(b), (c) or (d) occur:
(a) Any Person (other than a Wei Zhou Affiliate) becomes, after
the Effective Date, the beneficial owner (within the meaning of
Rule 13d-3 promulgated under the Exchange Act), directly or
indirectly, of fifty percent (50%) or more of the combined voting
power of the Company's then outstanding securities; or
(b) During any period of two (2) consecutive years, individuals,
who at the beginning of such period, constitute the Board and any
new Director of the Company (other than a Director designated by
a person who has entered into an agreement with the Company to
effect a transaction described in clause (a), (c) or (d) of this
definition) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3rds) of the Directors of the Company then
still in office who either were Directors of the Company at the
beginning of the two-year period or whose election or nomination
for election was previously so approved, cease for any reason to
constitute at least a majority of the Board;
(c) A merger or consolidation of the Company with any other
corporation, other than a merger or consolidation that would
result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%)
of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after
such merger or consolidation; provided, however, that a merger or
consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no person acquires more
than fifty percent (50%) of the combined voting power of the
Company's then outstanding securities or a merger or
consolidation primarily effected to change the Company's
jurisdiction of incorporation shall not constitute a Change in
Control, and provided further a merger or consolidation in which
the Company is the surviving entity (other than as a wholly owned
subsidiary of another entity) and in which the Board of Directors
of the Company or the successor to the Company after giving
effect to the merger or consolidation, is comprised of a majority
of members who are either (x) Directors of the
B-20
Company immediately preceding the merger or consolidation,
or (y) appointed to the Board of Directors by the Company
(or the Board) as an integral part of such merger or
consolidation, shall not constitute a Change in Control; or
(d) Approval by the stockholders of the Company or any order by
a court of competent jurisdiction of a plan of liquidation of the
Company, or the sale or disposition by the Company of all or
substantially all of the Company's assets other than (i) the sale
or disposition of all or substantially all of the assets of the
Company to a person or persons who beneficially own, directly or
indirectly, at least fifty percent (50%) or more of the combined
voting power of the outstanding voting securities of the Company
at the time of the sale; or (ii) pursuant to a dividend in kind
or spin-off type transaction, directly or indirectly, of such
assets to the stockholders of the Company;
(e) Notwithstanding the foregoing, a Change in Control of the
type described in clauses (b), (c) or (d) above shall be deemed
to be completed on the date it occurs, and a Change in Control of
the type described in clause (a) above shall be deemed to be
completed as of the date the entity or group attaining fifty
percent (50%) or greater ownership has elected its
representatives to the Board of Directors and/or caused its
nominees to become officers of the Company with the authority to
terminate or alter the terms of any Employee's employment.
"Common Stock" means the common stock of the Company, par value
$0.001 per share, as constituted on the Effective Date, and as
thereafter adjusted as a result of any one or more events
requiring adjustment of outstanding Awards under Section 3.4
above or any other provision of this Plan.
"Company" means INTAC International, Inc., a Nevada corporation,
and its successors.
"Consultant" means any consultant or advisor if:
(a) the consultant or advisor renders bona fide services to
the Company or any Affiliated Entity;
(b) the services rendered by the consultant or advisor are
not in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or
indirectly promote or maintain a market for the Company's
securities; and
(c) the consultant or advisor is a natural person who has
contracted directly with the Company or an Affiliated Entity
to render such services.
"Director" means any person serving on the Board of the Company
or the Board of Directors of an Affiliated Entity irrespective of
whether such person is also an Employee of the Company or an
Affiliated Entity.
B-21
"DRO" means a domestic relations order as defined by the IRC or
Title I of ERISA or the rules thereunder.
"Effective Date" means November 28, 2001, which is the date this
Plan was adopted by the Board.
"Eligible Person" shall include key Employees, Directors and
Consultants of the Company or of any Affiliated Entity.
"Employee" means any officer or other employee (as defined in
accordance with Section 3401(c) of the IRC) of the Company or any
Affiliated Entity.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended.
"Exchange Act Registered Company" means that the Company has any
class of any equity security registered pursuant to Section 12 of
the Exchange Act.
"Expiration Date" means the tenth anniversary of the Effective
Date.
"Fair Market Value" of a share of the Company's capital stock as
of a particular date shall be: (a) if the stock is listed on an
established stock exchange or exchanges (including for this
purpose, the NASDAQ National Market), the closing sale price of
the stock quoted for such date as reported in the transactions
index of each such exchange, as published in The Wall Street
Journal and determined by the Administering Body, or, if no sale
price was quoted in any such index for such date, then as of the
next preceding date on which such a sale price was quoted; or
(b) if the stock is not then listed on an exchange or the NASDAQ
National Market, the average of the closing bid and asked prices
per share for the stock in the over-the-counter market as quoted
on the NASDAQ Small Cap Market on such date, or if not so quoted,
on the OTC Bulletin Board on such date; or (c) if the stock is
not then listed on an exchange or quoted in the over-the-counter
market or the OTC Bulletin Board, an amount determined in good
faith by the Administering Body; provided, however, that (i) when
appropriate, the Administering Body, in determining Fair Market
Value of capital stock of the Company, may take into account such
other factors as it may deem appropriate under the circumstances
and (ii) if the stock is traded on the NASDAQ Small Cap Market
and both sales prices and bid and asked prices are quoted or
available, the Administering Body may elect to determine Fair
Market Value under either clause (a) or (b) above.
Notwithstanding the foregoing, the Fair Market Value of capital
stock for purposes of grants of Incentive Stock Options shall be
determined in compliance with applicable provisions of the IRC.
"Incentive Stock Option" means a Stock Option that qualifies as
an incentive stock option under Section 422 of the IRC, or any
successor statute thereto.
"IRC" means the Internal Revenue Code of 1986, as amended.
B-22
"Just Cause Dismissal" shall mean a termination of a Recipient's
employment for any of the following reasons: (a) the Recipient
violates any reasonable rule or regulation of the Board, the
Company's Chief Executive Officer or the Recipient's superiors
that results in material damage to the Company or an Affiliated
Entity or which, after written notice to do so, the Recipient
fails to correct within a reasonable time; (b) any willful
misconduct or gross negligence by the Recipient in the material
responsibilities assigned to the Recipient; (c) any willful
failure to perform the Recipient's job as required to meet the
objectives of the Company and/or an Affiliated Entity; (d) any
wrongful conduct of a Recipient that has a material adverse
impact on the Company or an Affiliated Entity or which
constitutes a misappropriation of assets of the Company or an
Affiliated Entity; (e) the Recipient's performing services for
any other person or entity that competes with the Company and/or
an Affiliated Entity while the Recipient is employed by the
Company or an Affiliated Entity, without the express written
approval of the Chief Executive Officer of the Company or an
Affiliated Entity, as applicable; or (f) any other conduct that
the Administering Body determines constitutes just cause for
dismissal; provided, however, that if a Recipient is party to an
employment agreement with the Company and/or an Affiliated Entity
providing for just cause dismissal (or some comparable notion) of
such Recipient from his or her employment with the Company or an
Affiliated Entity, "Just Cause Dismissal" for purposes of this
Plan shall have the same meaning as ascribed thereto or to such
comparable notion in such employment agreement.
"Non-Employee Director" means any director of the Company who
qualifies as a "non-employee director" within the meaning of
Rule 16b-3.
"Non-qualified Stock Option" means a Stock Option that is not an
Incentive Stock Option.
"Outside Director" means an "outside director" as defined in the
regulations adopted under Section 162(m) of the IRC.
"Parent Corporation" means any parent corporation of the Company
as defined in Section 424(e) of the IRC.
"Performance-Based Compensation" means performance-based
compensation as described in Section 162(m)4(C) of the IRC.
"Performance Criteria" means the following business criteria with
respect to the Company, any Affiliated Entity or any division or
operating unit of any thereof: (a) income or net income, (b) pre-
tax income, (c) operating income or net operating income, (d)
cash flow, (e) earnings per share (including earnings before
interest, taxes and amortization), (f) return on equity, (g)
return on invested capital or assets, (h) cost reductions or
savings, (i) funds from operations, (j) appreciation in the fair
market value of Common Stock, (k) earnings before any one or more
of the following items: interest, taxes, depreciation or
amortization, (1) book value of Common Stock, (m) total
stockholder return, (n) return on capital, (o) return on assets
or net assets, or (p) operating margin.
B-23
"Permanent Disability" means that the Recipient becomes
physically or mentally incapacitated or disabled so that the
Recipient is unable to perform substantially the same services as
the Recipient performed prior to incurring such incapacity or
disability (the Administering Body, at its option and the
Company's expense, may retain a physician to confirm the
existence of such incapacity or disability, and the determination
of such physician shall be binding upon the Company and the
Recipient), and such incapacity or disability continues for a
period of three consecutive months or six months in any 12-month
period or such other period(s) as may be determined by the
Administering Body with respect to any Award, provided that for
purposes of determining the period during which an Incentive
Stock Option may be exercised pursuant to Section 5.13(b)(ii)
hereof, Permanent Disability shall mean "permanent and total
disability" as defined in Section 22(e) of the IRC.
"Person" means any person, entity or group, within the meaning of
Section 13(d) or 14(d) of the Exchange Act, but excluding (a) the
Company and its Affiliated Entities, (b) any employee stock
ownership or other employee benefit plan maintained by the
Company that is qualified under ERISA, (c) any trustee or other
fiduciary holding securities under any employee benefit plan of
the Company or an Affiliated Entity, (d) any company owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of Common
Stock of the Company, or (e) any entity holding non-participating
shares of an entity which is a shareholder of the Company or
which owns or controls, directly or indirectly, a shareholder of
the Company becomes the "beneficial owner" (as defined in Rule
13d-3 under the Act), directly or indirectly, of securities of
the Company representing fifty percent (50%) or more of the
combined voting power of the Company's then outstanding
securities.
"Plan" means this 2001 Long Term Incentive Plan of the Company.
"Plan Term" means the period during which this Plan remains in
effect (commencing on the Effective Date and ending on the
Expiration Date).
"Recipient" means an Eligible Person who has received an Award or
Awards under this Plan or any person who is recognized under the
Plan as the successor in interest to such Eligible Person with
respect to such Eligible Person's Award.
"Reorganization" means any merger, consolidation, business
combination, other reorganization or other similar transaction.
"Retirement" means normal retirement from employment with the
Company or an Affiliated Entity in accordance with the retirement
policies of the Company or any such Affiliated Entity then in
effect as determined by the Administering Body.
"Rule 16b-3" means Rule 16b-3 under the Exchange Act or any
successor or similar rule under the Exchange Act, as the same may
be amended from time to time.
B-24
"Securities Act" means the Securities Act of 1933, as amended.
"Significant Shareholder" is an individual who, at the time an
Award is granted to such individual under this Plan, owns more
than ten percent (10%) of the combined voting power of all
classes of stock of the Company or of any Parent Corporation or
Subsidiary Corporation (after application of the attribution
rules set forth in Section 424(d) of the IRC).
"Stock Option" or "Option" means a right to purchase stock of the
Company granted under Article 6 of this Plan to an Eligible
Person.
"Stock Plan Committee" means the committee appointed by the Board
to administer this Plan pursuant to Section 4.1.
"Subsidiary Corporation" means any subsidiary corporation of the
Company as defined in Section 424(f) of the IRC.
"Wei Zhou Affiliate" means Wei Zhou or any entity controlled by
Wei Zhou.
B-25