Exhibit B
TELESOFT CORP.
1996 RESTRICTED STOCK PLAN
1. Purposes of the Plan. The purposes of this 1996 Restricted
Stock Plan are to provide additional incentive to employees and others who
provide services to the Company to achieve financial results aimed at
increasing stockholder value and to attract and retain the best available
personnel for positions of responsibility within the Company through the grant
of restricted shares of the Company's Common Stock.
2. Definitions. As used herein, the following definitions shall
apply:
(a) "Award" shall mean a grant of one or more shares of
Restricted Stock.
(b) "Board" shall mean the Board of Directors of the
Company or, when appropriate, the Committee administering the
Plan, if one has been appointed.
(c) "Code" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated
thereunder.
(d) "Common Stock" shall mean the common stock of
the Company described in the Company's Articles of Incorporation, as
amended.
(e) "Company" shall mean TELESOFT CORP., an
Arizona corporation, and shall include any parent or subsidiary
corporation of the Company as defined in Sections 425(e) and (f),
respectively, of the Code.
(f) "Committee" shall mean the Committee appointed by
the Board in accordance with paragraph (a) of Section 4 of the Plan,
if one is appointed.
(g) "Employee" shall mean any person, including
salaried officers and directors, employed by the Company.
(h) "Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended.
(i) "Fair Market Value" shall mean, with respect to the
date a given Award is granted, the value of the Common Stock
determined by the Board in such manner as it may deem equitable for
Plan purposes; provided, however, that where there is a public market
for the Common Stock, the Fair Market Value per Share shall be the
mean of the bid and asked prices of the Common Stock on the date of
grant, as reported in the Wall Street Journal, or, if not so reported, as
otherwise reported in the National Association of Securities Dealers
Automated Quotation System ("Nasdaq"), or, in the event the
Common Stock is listed on the New York Stock Exchange, the
American Stock Exchange, the Nasdaq National Market or the
Nasdaq SmallCap Market, the Fair Market Value per Share shall be
the closing price on the relevant Nasdaq market or exchange on the
date of grant of the Award, as reported in the Wall Street Journal.
(j) "Grantee" shall mean an employee or other
individual who provides services to the Company who has been
granted one or more shares of Restricted Stock.
(k) "Parent" shall mean a "parent corporation," whether
now or hereafter existing, as defined in Section 425(e) of the Code.
(l) "Plan" shall mean this 1996 Restricted Stock Plan.
(m) "Restricted Stock" shall mean Common Stock, issued
and outstanding, restricted as to transfer and subject to a substantial
risk of forfeiture.
(n) Share" shall mean a share of the Common Stock, as
adjusted in accordance with Section 8 of the Plan.
(o) "Stock Purchase Agreement" shall mean the written
agreement between the Company and the Grantee relating to the grant
of an Award.
(p) "Subsidiary" shall mean a "subsidiary corporation,"
whether now or hereafter existing, as defined in Section 425(f) of the
Code.
(q) "Tax Date" shall mean the date a Grantee is required
to pay the Company an amount with respect to tax withholding
obligations in connection with an Award.
3. Common Stock Subject to the Plan. Subject to the
provisions of Section 8 of the Plan, the maximum aggregate number of shares
of Common Stock which may be granted under the Plan may be determined by
the Board of Directors, for issuance as part of the total Shares reserved under
the 1996 Incentive Stock Option Plan. The Shares may be authorized, but
unissued, or previously issued Shares acquired by the Company and held in
treasury. If Restricted Stock is forfeited, the forfeited Shares shall,
unless the Plan shall have been terminated, be available for future grants
under the Plan.
4. Administration of the Plan.
(a) Procedure.
(i) The Plan shall be administered by the Board
in accordance with Rule 16b-3 under the Exchange Act
("Rule 16b-3"); provided, however, that the Board may
appoint a Committee to administer the Plan at any time or
from time to time, and, provided further, that if the Board is
not "disinterested" within the meaning of Rule 16b-3, the Plan
shall be administered by a Committee in accordance with
Rule 16b-3.
(ii) Once appointed, the Committee shall
continue to serve until otherwise directed by the Board. From
time to time the Board may increase the size of the Committee
and appoint additional members thereof, remove members
(with or without cause), appoint new members in substitution
therefor, and fill vacancies however caused: provided,
however, that at no time may any person serve on the
Committee if that person's membership would cause the
Committee not to satisfy the "disinterested administration"
requirements of Rule 16b-3.
(b) Powers of the Board. Subject to the provisions of
the Plan, the Board shall have the authority, in its discretion: (i) to
grant Restricted Stock; (ii) to determine, upon review of relevant
information and in accordance with Section 2 of the Plan, the Fair
Market Value of the Common Stock; (iii) to determine the Employees
and other individuals who provide services to the Company to whom,
and the time or times at which, Restricted Stock shall be granted and
the number of Shares to be represented by each Award; (iv) to
interpret the Plan; (v) to prescribe, amend and rescind rules and
regulations relating to the Plan; (vi) to determine the terms and
provisions of each Award granted (which need not be identical) and,
with the consent of the Grantee thereof, modify or amend each Award;
(vii) to accelerate or defer (with the consent of the Grantee) the date of
any Award; (viii) to authorize any person to execute on behalf of the
Company any instrument required to effectuate the grant of an Award
previously granted by the Board; (ix) to accept or reject the election
made by a Grantee pursuant to Section 14 of the Plan; and (x) to
make all other determinations deemed necessary or advisable for the
administration of the Plan.
(c) Effect of Board's Decision. All decisions,
determinations and interpretations of the Board shall be final and
binding on all Grantees and any other holders of any Restricted Stock
granted under the Plan.
5. Eligibility. Consistent with the Plan's purposes, Restricted
Stock may be granted only to Employees and other individuals who provide
services to the Company as determined by the Board. An Employee or other
individual who provides services to the Company who has been granted
Restricted Stock may, if he is otherwise eligible, be granted additional
Restricted Stock.
6. Stockholder Approval and Effective Dates. The Plan
became effective upon approval by the Board. No Award may be granted
under the Plan after April 14, 2006. The grant of any Restricted Stock under
the Plan is effective only upon approval of the Plan by the Shareholders.
7. Restricted Stock.
(a) Awards. The Committee may award Restricted
Stock to any Employee or other individual who provides services to
the Company. Each certificate for Restricted Stock shall be registered
in the name of the Grantee and deposited by him, together with a stock
power endorsed in blank, with the Company. Restricted Stock shall
be awarded by a signed written agreement containing such terms and
conditions as the Board may determine. At the time of an award there
shall be established a restriction period of such length as shall be
determined by the Board. Shares of Restricted Stock shall not be
sold, assigned, transferred, pledged or otherwise encumbered, except
as hereinafter provided, during the restriction period. Except for such
restrictions on transfer, the Grantee as owner of such shares of
Restricted Stock shall have all the rights of a holder of Common
Stock. At the expiration of the restriction period, the Company shall
redeliver to the Grantee (or his legal representative or designated
beneficiary) the Restricted Stock deposited pursuant to this paragraph
7.
(b) Termination. If a Grantee ceases to be an Employee
or to provide services to the Company with the consent of the Board,
or upon his death, retirement or total and permanent disability, the
restriction imposed under paragraph 7(a) shall lapse with respect to
such number of shares of Restricted Stock theretofore awarded to him
as shall be determined by the Board.
8. Adjustments Upon Changes in Capitalization or Merger.
Subject to any required action by the stockholders of the Company, the
number of shares of Common Stock which have been authorized for issuance
under the Plan but as to which no Award has yet been granted or which have
been returned to the Plan upon cancellation, shall be proportionately adjusted
for any increase or decrease in the number of issued shares of Common Stock
resulting from a stock split, reverse stock split, stock dividend, combination
or reclassification of the Common Stock, or any other increase or decrease in
the number of issued shares of Common Stock effected without receipt of
consideration by the Company; provided, however, that conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration." Such adjustment shall be made by
the Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided herein, no issuance by the Company
of shares of stock of any class, or securities convertible into shares of
stock of any class, shall affect and no adjustment by reason thereof, shall be
made with respect to the number or price of shares of Common Stock subject to
the Plan.
9. Time of Granting Restricted Stock. The date of grant of
Restricted Stock shall, for all purposes, be the date on which the Board makes
the determination granting such Restricted Stock. Notice of the determination
shall be given to each Employee or other individual who provides services to
the Company to whom an Award is so granted within a reasonable time after
the date of such grant.
10. Amendment and Termination of the Plan.
(a) Amendment and Termination. The Board may
amend or terminate the Plan from time to time in such respects as the
Board may deem advisable; provided, however, that the following
revisions or amendments shall require approval of the shareholders of
the Company, to the extent required by law, rule or regulation:
(i) Any material increase in the number of
Shares subject to the Plan, other than in connection with an
adjustment under Section 8 of the Plan;
(ii) Any material change in the designation of the
Employees or other individuals who provide services to the
Company eligible to be granted Restricted Stock; or
(iii) Any material increase in the benefits
accruing to participants under the Plan.
(b) Effect of Amendment or Termination. Any such
amendment or termination of the Plan shall not affect Restricted Stock
already granted and such Restricted Stock shall remain in full force
and effect as if this Plan had not been amended or terminated, unless
mutually agreed otherwise between the Grantee and the Board, which
agreement must be in writing and signed by the Grantee and the
Company.
11. Conditions Upon Issuance of Shares. Shares shall not be
issued pursuant to this Plan unless the issuance and delivery of such Shares
pursuant thereto shall comply with all relevant provisions of law, including,
without limitation, the Securities Act of 1933, as amended, the Exchange Act,
the rules and regulations promulgated thereunder, and the requirements of any
stock exchange upon which the Shares may then be listed, and shall be further
subject to the approval of counsel for the Company with respect to such
compliance.
As a condition to the grant of Restricted Stock the Company
may require the Grantee to represent and warrant at the time of any such grant
that the Shares are being acquired only for investment and without any present
intention to sell or distribute such Shares if, in the opinion of counsel for
the Company, such a representation is required by any of the aforementioned
relevant provisions of law.
Inability of the Company to obtain authority from any
regulatory body having jurisdiction, which authority is deemed by the
Company's counsel to be necessary to the lawful issuance and sale of any
Shares hereunder, shall relieve the Company of any liability in respect of the
failure to issue or sell such Shares as to which such requisite authority shall
not have been obtained.
12. Reservation of Shares. The Company will at all times
reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.
13. Purchase Agreement. Awards of Restricted Stock shall be
evidenced by Stock Purchase Agreements in such form as the Board shall
approve.
14. Withholding Taxes. Subject to Section 4(b)(ix) of the Plan
and prior to the Tax Date, the Grantee may make an irrevocable election to
have the Company withhold from those Shares that would otherwise be
received upon the grant, a number of Shares having a Fair Market Value equal
to the minimum amount necessary to satisfy the Employee's portion of the
Company's federal, state, local and foreign tax withholding obligations and
FICA and FUTA obligations with respect to the grant of Restricted Stock to
the Grantee.
A Grantee who is also an officer of the Company must make
the above described election:
(a) at least six months after the date of grant of the
Restricted Stock (except in the event of death or disability); and
(b) either:
(i) six months prior to the Tax Date, or
(ii) prior to the Tax Date and during the period
beginning on the third business day following the date the
Company releases its quarterly or annual statement of sales
and earnings and ending on the twelfth business day following
such date.
15. Miscellaneous Provisions.
(a) Plan Expense. Any expense of administering this
Plan shall be borne by the Company.
(b) Construction of Plan. The place of administration of
the Plan shall be in the State of Arizona, and the validity,
construction, interpretation, administration and effect of the Plan and
of its rules and regulations, and rights relating to the Plan, shall be
determined in accordance with the laws of the State of Arizona
without regard to conflict of law principles and, where applicable, in
accordance with the Code.
(c) Taxes. The Company shall be entitled if necessary or
desirable to pay or withhold the amount of any tax attributable to the
delivery of Common Stock under the Plan from other amounts
payable to the Grantee after giving the person entitled to receive such
Common Stock notice as far in advance as practical, and the
Company may defer making delivery of such Common Stock if any
such tax may be pending unless and until indemnified to its
satisfaction.
(d) Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board, the
members of the Board shall be indemnified by the Company against
all costs and expenses reasonably incurred by them in connection with
any action, suit or proceeding to which they or any of them may be
party by reason of any action taken or failure to act under or in
connection with the Plan or any Restricted Stock, and against all
amounts paid by them in settlement thereof (provided such settlement
is approved by independent legal counsel selected by the Company) or
paid by them in satisfaction of a judgment in any such action, suit or
proceeding, except a judgment based upon a finding of bad faith;
provided that upon the institution of any such action, suit or
proceeding a Board member shall, in writing, give the Company
notice thereof and an opportunity, at its own expense, to handle and
defend the same before such Board member undertakes to handle and
defend it on her or his own behalf.
(e) Gender. For purposes of this Plan, words used in the
masculine gender shall include the feminine and neuter, and the
singular shall include the plural and vice versa, as appropriate.
(f) No Employment Agreement. The Plan shall not
confer upon any Grantee any right with respect to continuation of
employment with the Company, nor shall it interfere in any way with
his right or the Company's right to terminate his employment at any
time.
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