EXHIBIT 10.10
CALTON, INC.
2000 EQUITY INCENTIVE PLAN
1. PURPOSE.
The purpose of this Calton, Inc. 2000 Equity Incentive Plan (the "Plan") is to
advance the interests of Calton, Inc. (the "Company") and its subsidiaries by
enhancing the ability of the Company to (i) attract and retain employees and
other persons or entities who are in a position to make significant
contributions to the success of the Company and its subsidiaries; (ii) reward
such persons for such contributions; and (iii) encourage such persons or
entities to take into account the long-term interest of the Company through
ownership of shares of the Company's common stock, $.01 par value per share (the
"Common Stock").
The Plan is intended to accomplish these objectives by enabling the Company to
grant awards ("Awards") in the form of incentive stock options ("ISOs"),
nonqualified stock options ("Nonqualified Options") (ISOs and Nonqualified
Options shall be collectively referred to herein as "Options"), stock
appreciation rights ("SARs"), restricted stock ("Restricted Stock"), deferred
stock ("Deferred Stock"), or other stock based awards ("Other Stock Based
Awards"), all as more fully described below.
2. ADMINISTRATION.
The Plan will be administered by the Compensation Committee (the "Committee") of
the Board of Directors of the Company (the "Board"). The Committee may be
constituted to permit the Plan to comply with the "outside director" requirement
of Section 162(m)(4)(c)(i) of the Internal Revenue Code of 1986, as amended (the
"Code"), and the regulations promulgated thereunder, or any successor rules. The
Committee will determine the recipients of Awards, the times at which Awards
will be made, the size and type or types of Awards to be made to each recipient,
and will set forth in each such Award the terms, conditions and limitations
applicable to the Award granted. Awards may be made singly, in combination or in
tandem. The Committee will have full and exclusive power to interpret the Plan,
to adopt rules, regulations and guidelines relating to the Plan, to grant
waivers of Plan restrictions and to make all of the determinations necessary for
its administration. Such determinations and actions of the Committee, and all
other determinations and actions of the Committee made or taken under authority
granted by any provision of the Plan, will be conclusive and binding on all
parties.
3. EFFECTIVE DATE AND TERM OF PLAN.
The Plan will become effective on January 27, 2000, but shall be subject to
approval by the requisite vote of the Company's shareholders. Any Awards granted
under the Plan prior to such shareholder approval shall be conditioned upon such
shareholder approval and shall be null and void if such approval is not
obtained.
The Plan will terminate on January 27, 2010, subject to earlier termination of
the Plan by the Board pursuant to Section 18 herein. No Award may be granted
under the Plan after
the termination date of the Plan, but Awards previously granted may extend
beyond that date pursuant to the terms of such Awards.
4. SHARES SUBJECT TO THE PLAN.
Subject to adjustment as provided in Section 16 herein, the aggregate number of
shares of Common Stock reserved for issuance pursuant to Awards granted under
the Plan shall be four million (4,000,000) shares. The maximum number of shares
of Common Stock which may be issued to the Chief Executive Officer ("CEO") of
the Company pursuant to all Awards granted the CEO under the Plan shall not
exceed thirty-five percent (35%) of the number of shares of the Company's Common
Stock reserved for issuance hereunder. The maximum number of shares of the
Company's Common Stock awarded to any other "Participant" (as defined in Section
5 below) pursuant to all Awards granted to such Participant under the Plan shall
not exceed twenty percent (20%) of the number of shares of the Company's Common
Stock reserved for issuance hereunder.
The shares of Common Stock delivered under the Plan may be either authorized but
unissued shares of Common Stock or shares of the Company's Common Stock held by
the Company as treasury shares, including shares of Common Stock acquired by the
Company in open market and private transactions. No fractional shares of Common
Stock will be delivered pursuant to Awards granted under the Plan and the
Committee shall determine the manner in which fractional share value will be
treated.
If any Award requiring exercise by a Participant for delivery of shares of
Common Stock is cancelled or terminates without having been exercised in full,
or if any Award payable in shares of Common Stock or cash is satisfied in cash
rather than Common Stock, the number of shares of Common Stock as to which such
Award was not exercised or for which cash was substituted will be available for
future Awards of Common Stock; provided, however, that Common Stock subject to
an Option cancelled upon the exercise of an SAR shall not again be available for
Awards under the Plan unless, and to the extent that, the SAR is settled in
cash. Shares of Restricted Stock and Deferred Stock forfeited to the Company in
accordance with the Plan and the terms of the particular Award shall be
available again for Awards under the Plan unless the Committee determines
otherwise.
5. ELIGIBILITY AND PARTICIPATION.
Those eligible to receive Awards under the Plan (each, a "Participant" and
collectively, the "Participants") will be persons in the employ of the Company
or any of its subsidiaries designated by the Committee ("Employees") and other
persons or entities who, in the opinion of the Committee, are in a position to
make a significant contribution to the success of the Company or its
subsidiaries, including, without limitation, consultants and agents of the
Company or any subsidiary; provided, that such consultants and agents have been
actively engaged in the conduct of the business of the Company or any
subsidiary. A "subsidiary" for purposes of the Plan will be a present or future
corporation of which the Company owns or controls, or will own or control, more
than 50% of the total combined voting power of all classes of stock or other
equity interests.
6. OPTIONS.
(a) Nature of Options. An Option is an Award entitling the Participant to
purchase a specified number of shares of Common Stock at a specified
exercise price. Both ISOs, as defined in Section 422 of the Code, and
Nonqualified Options may be granted under the Plan; provided however,
that ISOs may be awarded only to Employees.
(b) Exercise Price. The exercise price of each Option shall be equal to
the "Fair Market Value" (as defined below) of the Common Stock on the
date the Award is granted to the Participant; provided, however, that
(i) in the Committee's discretion, the exercise price of a
Nonqualified Option may be less than the Fair Market Value of the
Common Stock on the date of grant; (ii) with respect to a Participant
who owns more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company, the option price of an
ISO granted to such Participant shall not be less than one hundred and
ten percent (110%) of the Fair Market Value of the Common Stock on the
date the Award is granted; and (iii) with respect to any Option
repriced by the Committee, the exercise price shall be equal to the
Fair Market Value of the Common Stock on the date such Option is
repriced unless otherwise determined by the Committee. For purposes of
this Plan, Fair Market Value shall mean the average of the high and
low sales prices of the Common Stock as reported on the American Stock
Exchange, or if not reported on the American Stock Exchange, on the
principal securities exchange on which the Common Stock is listed, or
if not so listed, the high and low sales prices (or the average of the
high asked and low bid prices of the Common Stock if sales price
information is not reported) of the Common Stock as reported by the
Nasdaq Stock Market or, if not reported on the Nasdaq Stock Market, by
the NASD OTC Bulletin Board or similar quotation service. If the
Common Stock is not publicly traded, Fair Market Value shall be
determined in good faith by the Board of Directors.
(c) Duration of Options. The term of each Option granted to a Participant
pursuant to an Award shall be determined by the Committee; provided,
however, that in no case shall an Option be exercisable more than ten
(10) years (five (5) years in the case of an ISO granted to a
ten-percent stockholder as defined in (b) above) from the date of the
Award.
(d) Exercise of Options and Conditions. Except as otherwise provided in
Sections 16 and 17 herein, and except as otherwise provided below with
respect to ISOs, Options granted pursuant to an Award will become
exercisable at such time or times, and on and subject to such
conditions, as the Committee may specify at the time of the Award. The
Options may be subject to such restrictions, conditions and forfeiture
provisions as the Committee may determine, including, but not limited
to, restrictions on transfer, continuous service with the Company or
any of its subsidiaries, achievement of business objectives, and
individual, division and Company performance. To the extent
exercisable, an Option may be exercised either in whole at any time or
in part from time to time. With respect to an ISO granted to a
Participant, the Fair Market Value of the shares of Common Stock on
the date of grant which are exercisable for the first time by a
Participant during any calendar year shall not exceed $100,000.
(e) Payment for and Delivery of Stock. Full payment for shares of Common
Stock purchased will be made at the time of the exercise of the
Option, in whole or in part. Payment of the purchase price will be
made in cash or in such other form as the Committee may permit,
including, without limitation, delivery of shares of Common Stock.
7. STOCK APPRECIATION RIGHTS.
(a) Nature of Stock Appreciation Rights. A SAR is an Award entitling the
recipient to receive payment, in cash and/or shares of Common Stock,
determined in whole or in part by reference to appreciation in the
value of a share of Common Stock. A SAR entitles the recipient to
receive in cash and/or shares of Common Stock, with respect to each
SAR exercised, the excess of the Fair Market Value of a share of
Common Stock on the date of exercise over the Fair Market Value of a
share of Common Stock on the date the SAR was granted.
(b) Grant of SARs. SARs may be subject to Awards in tandem with, or
independently of, Options granted under the Plan. A SAR granted in
tandem with an Option which is not an ISO may be granted either at or
after the time the Option is granted. A SAR granted in tandem with an
ISO may be granted only at the time the ISO is granted and may expire
no later than the expiration of the underlying ISO.
(c) Exercise of SARs. A SAR not granted in tandem with an Option will
become exercisable at such time or times, and on such conditions, as
the Committee may specify. A SAR granted in tandem with an Option will
be exercisable only at such times, and to the extent, that the related
option is exercisable. A SAR granted in tandem with an ISO may be
exercised only when the market price of the shares of Common Stock
subject to the ISO exceeds the exercise price of the ISO, and the SAR
may be for no more than one hundred percent (100%) of the difference
between the exercise price of the underlying ISO and the Fair Market
Value of the Common Stock subject to the underlying ISO at the time
the SAR is exercised. At the option of the Committee, upon exercise,
an SAR may be settled in cash, Common Stock or a combination of both.
8. RESTRICTED STOCK.
A Restricted Stock Award entitles the recipient to acquire shares of Common
Stock, subject to certain restrictions or conditions, for no cash consideration,
if permitted by applicable law, or for such other consideration as may be
determined by the Committee. The Award may be subject to such restrictions,
conditions and forfeiture provisions as the Committee may determine, including,
but not limited to, restrictions on transfer, continuous service with the
Company or any of its subsidiaries, achievement of business objectives, and
individual, division and Company performance. Subject to such restrictions,
conditions and forfeiture provisions as may be established by the Committee, any
Participant receiving an Award of Restricted Stock will have all the rights of a
stockholder of the Company with respect to the shares of Restricted Stock,
including the right to vote the shares and the right to receive any dividends
thereon.
9. DEFERRED STOCK.
A Deferred Stock Award entitles the recipient to receive shares of Common Stock
to be delivered in the future. Delivery of the shares of Common Stock will take
place at such time or times, and on such conditions, as the Committee may
specify. At the time any Deferred Stock Award is granted, the Committee may
provide that the Participant will receive an instrument evidencing the
Participant's right to future delivery of Deferred Stock.
10. DIRECTOR'S FEES.
Subject to the limitation contained in Section 4 of this Plan on the number of
shares of Common Stock which may be issued pursuant to this Plan, any member of
the Board who provides written notice to the Company shall be entitled to
receive all or a portion of the member's annual board retainer fee, Board
meeting fees, and Board committee fees in the form of shares of the Company's
Common Stock. Any member of the Board who desires to receive all or any part of
such Board fees in shares of Common Stock must provide the Chief Financial
Officer of the Company with written notice of the member's election (an
"Election") to receive payment of Board fees in this form no later than five (5)
business days prior to the date of payment of such fees. Shares of Common Stock
with an aggregate Fair Market Value, on the date preceding the date of payment
of Board fees, equal to the aggregate amount of such Board fees shall be issued
to the Board member no later than fifteen (15) business days following the date
of payment of such Board fees by the Company.
11. FORMULA AWARDS.
On each date that (i) an individual who is not an employee of the Company or any
subsidiary is elected or reelected as a director by the shareholders of the
Company and (ii) that an annual meeting of shareholders of the Company is held
during the term of office of such director (but excluding any annual meeting at
which such director's term of office expires and such director is not reelected)
such director shall receive, on such date, a grant of Nonqualified Stock options
to acquire ten thousand (10,000) shares of Common Stock and each such Option
shall have a per share exercise price equal to the Fair Market Value of the
Common Stock on such date of grant. Each Nonqualified Stock Option granted to a
non-employee Director pursuant to this Section 11 shall have a term of five (5)
years from the date of grant and shall vest and become fully exercisable on the
first anniversary of such date of grant. In order for a non-employee Director to
be granted such Nonqualified Stock options, the Director must have attended
seventy-five (75%) of all Board meetings and seventy-five percent (75%) of all
Board committee meetings, of which the Director is a member, called and held
during the previous twelve (12) months while such Director was a member of the
Board and committees). Notwithstanding anything to the contrary set forth above,
no awards of Nonqualified Stock Options shall be made pursuant to this Section
11 to a Director who is receiving a comparable award under the Company's 1996
Equity Incentive Plan. The provisions of this Section 11 of the Plan shall not
be amended more than once every six (6) months, other than to comport with
changes in the Internal Revenue Code of 1986, as amended, the Employee
Retirement Income Security Act of 1974, or the rules thereunder.
12. OTHER STOCK BASED AWARDS.
The Committee shall have the right to grant Other Stock Based Awards under the
Plan to Employees which may include, without limitation, the grant of shares of
Common Stock as bonus compensation and the issuance of shares of Common Stock in
lieu of an Employee's cash compensation.
13. AWARD AGREEMENTS.
The grant of any Award under the Plan may be evidenced by an agreement which
shall describe the specific Award granted and the terms and conditions of the
Award. Any Award shall be subject to the terms and conditions of any such
agreement required by the Committee.
14. TRANSFERS.
No Award (other than an outright Award in the form of Common Stock without any
restrictions) may be assigned, pledged or transferred other than by will or by
the laws of descent and distribution and, during a Participant's lifetime, will
be exercisable only by the Participant or, in the event of a Participant's
incapacity, by the Participant's guardian or legal representative.
15. RIGHTS OF A STOCKHOLDER.
Except as specifically provided by the Plan, the receipt of an Award will not
give a Participant rights as a stockholder of the Company. The Participant will
obtain such rights, subject to any limitations imposed by the Plan, or the
instrument evidencing the Award, upon actual receipt of shares of Common Stock.
16. CONDITIONS ON DELIVERY OF STOCK.
The Company will not be obligated to deliver any shares of Common Stock pursuant
to the Plan or to remove any restrictions or legends from shares of Common Stock
previously delivered under the Plan until, (a) in the opinion of the Company's
counsel, all applicable federal and state laws and regulations have been
complied with, (b) until the shares of Common Stock to be delivered have been
listed or authorized to be listed on the American Stock Exchange (or such other
exchange or quotation system on which shares of Common Stock may be listed or
quoted), and (c) until all other legal matters in connection with the issuance
and delivery of such shares of Common Stock have been approved by the Company's
counsel. If the sale of shares of Common Stock has not been registered under the
Securities Act of 1933, as amended (the "Act"), and qualified under the
appropriate "blue sky" laws, the Company may require, as a condition to exercise
of the Award, such representations and agreements as counsel for the Company may
consider appropriate to avoid violation of such Act and laws and may require
that the certificates evidencing such shares of Common Stock bear an appropriate
legend restricting transfer.
If an Award is exercised by a Participant's legal representative, the Company
will be under no obligation to deliver shares of Common Stock pursuant to such
exercise until the Company is satisfied as to the authority of such
representative.
17. TAX WITHHOLDING.
The Company will have the right to deduct from any cash payment under the Plan
taxes that are required to be withheld and to condition the obligation to
deliver or vest shares of Common Stock under this Plan upon the Participant's
paying the Company such amount as the Company may request to satisfy any
liability for applicable withholding taxes. The Committee may in its discretion
permit Participants to satisfy all or part of their withholding liability either
by delivery of shares of Common Stock held by the Participant or by withholding
shares of Common Stock to be delivered to a Participant upon the grant or
exercise of an Award.
18. ADJUSTMENT OF AWARD.
(a) In the event that a dividend shall be declared upon the Common Stock
payable in shares of Common Stock, the number of shares of the Common
Stock then subject to any Award and the number of shares of the Common
Stock which may be issued under the Plan but not yet covered by an
Award shall be adjusted by adding to each share the number of shares
which would be distributable thereon if such shares had been
outstanding on the date fixed for determining the stockholders
entitled to receive such stock dividend. In the event that the
outstanding shares of the Common Stock shall be changed into or
exchanged for a different number or kind of shares of Common Stock or
other securities of the Company or of another corporation or for cash,
whether through reorganization, recapitalization, stock split,
combination of shares, sale of assets, merger or consolidation in
which the Company is the surviving corporation, then, there shall be
substituted for each share of the Common Stock then subject to any
Award, the number and kind of shares of stock or other securities or
the amount of cash into which each outstanding share of the Common
Stock shall be so changed or for which each such share shall be
exchanged.
(b) In the event of a proposal, which is approved by the Board, of any
merger or consolidation involving the Company where the Company is not
the surviving entity, any sale of substantially all of the Company's
assets or any other transaction or series of related transactions as a
result of which a single person or several persons acting in concert
own a majority of the Company's then outstanding Common Stock (such
merger, consolidation, sale of assets, or other transaction being
hereinafter referred to as a "Transaction"), all outstanding options
and SARs shall become exercisable immediately before or
contemporaneously with the consummation of such Transaction and each
outstanding share of Restricted Stock and each outstanding Deferred
Stock Award shall immediately become free of all restrictions and
conditions upon consummation of such Transaction. Immediately
following the consummation of the Transaction, all outstanding Options
and SARs shall terminate and cease to be exercisable.
In lieu of the foregoing, if the Company will not be the surviving
corporation or entity, the Committee may arrange to have such
acquiring or surviving corporation or entity, or an "Affiliate,, (as
defined below) thereof, grant replacement Awards which shall be
immediately exercisable to Participants holding outstanding Awards.
The term "Affiliate," with respect to any Person, shall mean any other
Person who is, or would be deemed to be an "affiliate" or an
"associate" of such Person within the respective meanings ascribed to
such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934. The term "Person" shall mean a
corporation, association, partnership, joint venture, trust,
organization, business, individual or government or any governmental
agency or political subdivision thereof.
(c) In the event of the dissolution or liquidation of the Company (except
a dissolution or liquidation relating to a sale of assets or other
reorganization of the Company referred to in the preceding sections),
the outstanding options and SARs shall terminate as of a date fixed by
the Committee; provided, however, that not less than thirty (30) days
written notice of the date so fixed shall be given to each Participant
who shall have the right during such period to exercise the
Participant's Options or SARs as to all or any part of the shares of
Common Stock covered thereby. Further, in the event of the dissolution
or liquidation of the Company, each outstanding share of Restricted
Stock and each outstanding Deferred Stock Award shall immediately
become free of all restrictions and conditions.
19. TERMINATION OF SERVICE.
Upon a Participant's termination of service with the Company or a subsidiary (if
an employee only of a subsidiary), any outstanding Award shall be subject to the
terms and conditions set forth below, unless otherwise determined by the
Committee:
(a) In the event a Participant leaves the employ or service of the Company
or a subsidiary of the Company, prior to the Participant's 65th
birthday, whether voluntarily or otherwise but other than by reason of
the Participant's death or "disability" (as such term is defined in
Section 22(e)(3) of the Code), each Option and SAR granted to the
Participant shall terminate upon the earlier to occur of (i) the
expiration of the period three (3) months after the date of such
termination and (ii) the date specified in the Option or SAR;
provided, that, prior to the termination of such Option or SAR, the
Participant shall be able to exercise any part of the Option or SAR
which is exercisable as of the date of termination. Further, each
outstanding share of Restricted Stock and each outstanding Deferred
Stock Award which remains subject to any restrictions or conditions of
the Award shall be forfeited to the Company upon such date of
termination.
(b) In the event a Participant's employment with or service to the Company
or its subsidiaries terminates by reason of the Participant's death or
"disability" (as such term is defined in Section 22(e)(3) of the
Code), each Option and SAR granted to the Participant shall become
immediately exercisable in full and shall terminate upon the earlier
to occur of (i) the expiration of the period six (6) months after the
date of such termination and (ii) the date specified in the option or
SAR. Further, each outstanding share of Restricted Stock and each
outstanding Deferred Stock Award shall immediately become free of all
restrictions and conditions upon the date of such termination.
(c) In the event a Participant voluntarily or involuntarily leaves the
employ or service of the Company or a subsidiary of the Company, after
the Participant's 65th birthday, each Option and SAR granted to the
Participant shall become immediately exercisable in full and shall
terminate upon the earlier to occur of (i) the expiration of three (3)
months after the date of such termination and (ii) the date specified
in the Option or SAR. Further, each outstanding share of Restricted
Stock and each outstanding Deferred Stock Award shall immediately
become free of all restrictions and conditions upon the date of such
termination.
20. AMENDMENTS AND TERMINATION.
The Committee will have the authority to make such amendments to any terms and
conditions applicable to outstanding Awards as are consistent with this Plan;
provided, that, except for adjustments under Section 16 hereof, no such action
will modify such Award in a manner adverse to the Participant without the
Participant's consent except as such modification is provided for or
contemplated in the terms of the Award.
The Board may amend, suspend or terminate the Plan, subject to shareholder
approval if so required by any applicable federal or state securities laws, tax
laws or corporate statute, except that no action may, without the consent of a
Participant, adversely affect any Award previously granted to the Participant
under the Plan.
21. SUCCESSORS AND ASSIGNS.
The provisions of this Plan shall be binding upon all successors and assigns of
any such Participant including, without limitation, the estate of any such
Participant and the executors, administrators, or trustees of such estate, and
any receiver, trustee in bankruptcy or representative of the creditors of any
such Participant.
22. MISCELLANEOUS.
(a) This Plan shall be governed by and construed in accordance with the
laws of the State of New Jersey.
(b) Any and all funds received by the Company under the Plan may be used
for any corporate purpose.
(c) Nothing contained in the Plan or any Award granted under the Plan
shall confer upon a Participant any right to be continued in the
employment of the Company or any subsidiary, or interfere in any way
with the right of the Company, or its subsidiaries, to terminate the
employment relationship at any time.