EXHIBIT 10.51
COLORADO MEDTECH, INC.
2001 LONG-TERM INCENTIVE PLAN
SECTION 1. PURPOSE. The purpose of this Plan is to advance the
interests of Colorado MEDtech, Inc. (the "Company") and its shareholders by
providing incentives to certain Eligible Persons (as defined below) who
contribute significantly to the strategic and long-term performance objectives
and growth of the Company.
SECTION 2. DEFINITIONS. The definitions applicable to this Plan are
provided in Appendix A.
SECTION 3. ADMINISTRATION. The Committee shall administer this Plan and
shall have all the powers vested in it by the terms of this Plan, such powers to
include without limitation exclusive authority to select the Eligible Persons to
be granted Awards under this Plan, to determine the type, size and terms of the
Award to be made to each Eligible Person selected, to modify the terms of any
Award that has been granted, to determine the time when Awards will be granted,
to establish performance objectives, to make any adjustments necessary or
desirable as a result of the granting of Awards to Eligible Persons located
outside the United States and to prescribe the form of the agreements evidencing
Awards made under this Plan. The Committee is authorized to interpret this Plan
and the Awards granted under this Plan, to establish, amend and rescind any
rules and regulations relating to this Plan, and to make any other
determinations that it deems necessary or desirable for the administration of
this Plan. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in this Plan or in any Award in the manner and to
the extent the Committee deems necessary or desirable to carry it into effect.
Any decision of the Committee in the interpretation and administration of this
Plan, as described in this Plan, shall lie within the Committee's sole and
absolute discretion and shall be final, conclusive and binding on all parties
concerned. The Committee may act only by a majority of its members in office,
except that the Committee may authorize any one or more of their members or any
officer of the Company to execute and deliver documents or to take any other
ministerial action on behalf of the Committee with respect to Awards made or to
be made to Participants.
No member of the Committee and no officer of the Company shall be
liable for anything done or omitted to be done by him, by any other member of
the Committee or by any officer of the Company in connection with the
performance of duties under this Plan, except for his own willful misconduct or
as expressly provided by statute. In addition to all other rights of
indemnification and reimbursement to which a member of the Committee and an
officer of the Company may be entitled, the Company shall indemnify and hold
harmless each such member or officer who was or is a party or is threatened to
be made a party to any threatened, pending or completed proceeding or suit in
connection with the performance of duties under this Plan against expenses
(including reasonable attorneys' fees), judgments, fines, liabilities, losses
and amounts paid in settlement actually and reasonably incurred by him in
connection with such proceeding or suit, except for his own willful misconduct
or as expressly provided otherwise by statute. Expenses (including reasonable
attorneys' fees) incurred by a such a member or officer in defending any such
proceeding or suit shall be paid by the Company in advance of the final
disposition of such proceeding or suit upon receipt of a written affirmation by
such member or officer of his good faith belief that he has met the standard of
conduct necessary for indemnification and a written undertaking by or on behalf
of such member or officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the Company as
authorized in this Section.
SECTION 4. PARTICIPATION. Consistent with the purposes of this Plan,
the Committee shall have exclusive power to select the Eligible Persons who may
participate in this Plan and be granted Awards
under this Plan. Eligible Persons may be selected individually or by groups or
categories, as determined by the Committee in its discretion.
SECTION 5. AWARDS UNDER THIS PLAN.
(a) Types of Awards. Awards under this Plan may include, but
need not be limited to, one or more of the following types, either
alone or in any combination thereof: (i) Stock Options, (ii) Stock
Appreciation Rights, (iii) Restricted Stock, (iv) Performance Grants
and (v) any other type of Award deemed by the Committee in its
discretion to be consistent with the purposes of this Plan (including,
but not limited to, Awards of or options or similar rights granted with
respect to unbundled stock units or components thereof, and Awards to
be made to Participants who are foreign nationals or are employed or
performing services outside the United States).
(b) Maximum Number of Shares that May be Issued. There may be
issued under this Plan (as Restricted Stock, in payment of Performance
Grants, pursuant to the exercise of Stock Options or Stock Appreciation
Rights or in payment of or pursuant to the exercise of such other
Awards as the Committee, in its discretion, may determine) an aggregate
of not more than 1,000,000 Common Shares, subject to adjustment as
provided in Section 15. No Eligible Person may receive Awards under
this Plan for more than 250,000 Common Shares in any one fiscal year of
the Company, subject to adjustment as provided in Section 15. Common
Shares issued pursuant to this Plan may be either authorized but
unissued shares, treasury shares, reacquired shares or any combination
thereof. If any Common Shares issued as Restricted Stock or otherwise
subject to repurchase or forfeiture rights are reacquired by the
Company pursuant to such rights or, if any Award is canceled,
terminates or expires unexercised, any Common Shares that would
otherwise have been issuable pursuant thereto will be available for
issuance under new Awards.
(c) Rights with Respect to Common Shares and Other Securities.
Except as provided in subsection 8(c) with respect to Awards of
Restricted Stock and unless otherwise determined by the Committee in
its discretion, a Participant to whom an Award is made (and any person
succeeding to such a Participant's rights pursuant to this Plan) shall
have no rights as a shareholder with respect to any Common Shares or as
a holder with respect to other securities, if any, issuable pursuant to
any such Award until the date of the issuance of a stock certificate to
him for such Common Shares or other instrument of ownership, if any.
Except as provided in Section 15, no adjustment shall be made for
dividends, distributions or other rights (whether ordinary or
extraordinary, and whether in cash, securities, other property or other
forms of consideration, or any combination thereof) for which the
record date is prior to the date such stock certificate or other
instrument of ownership, if any, is required to be issued based upon
the date any Award was exercised. In all events, a Participant with
whom an Award agreement is made to issue Common Shares in the future,
shall have no rights as a shareholder with respect to Common Shares
related to such agreement until issuance to him of a stock certificate
representing such shares.
SECTION 6. STOCK OPTIONS. The Committee may sell Purchased Options or
grant other Stock Options either alone, or in conjunction with Associated
Awards, either at the time of grant or by amendment thereafter; provided that an
Incentive Stock Option may be granted only to Eligible Persons who are employees
of the Company and who have Associated Awards only to the extent that such
Associated Awards do not disqualify the Incentive Stock Option's status as such
under the Code. Each Stock Option granted or sold under this Plan shall be
evidenced by an agreement in such form as the Committee shall prescribe from
time to time in accordance with this Plan and shall comply with the applicable
terms and conditions of this Section and this Plan, and with such other terms
-2-
and conditions, including, but not limited to, restrictions upon the Stock
Option or the Common Shares issuable upon exercise thereof, as the Committee, in
its discretion, shall establish.
(a) The exercise price of a Stock Option may be less than,
equal to, or greater than, the Fair Market Value of the Common Shares
subject to such Stock Option at the time the Stock Option is granted,
as determined by the Committee; provided, however, that in the case of
an Incentive Stock Option granted to an employee of the Company, the
exercise price shall not be less than the Fair Market Value of the
Common Shares subject to such Stock Option at the time the Stock Option
is granted, or if granted to a Ten Percent Employee, such exercise
price shall not be less than 110% of such Fair Market Value at the time
the Stock Option is granted. In no event, however, will the exercise
price per share of a Stock Option be less than the par value per share
of a Common Share.
(b) The Committee shall determine the number of Common Shares
to be subject to each Stock Option. In the case of a Stock Option
awarded in conjunction with an Associated Award, the number of Common
Shares subject to an outstanding Stock Option may be reduced on an
appropriate basis to the extent that the Associated Award has been
exercised, paid to or otherwise received by the Participant, as
determined by the Committee.
(c) Any Stock Option may be exercised during its term only at
such time or times and in such installments as the Committee may
establish.
(d) A Stock Option shall not be exercisable:
(i) in the case of any Incentive Stock Option granted
to a Ten Percent Employee, after the expiration of five years
from the date it is granted, and, in the case of any other
Stock Option, after the expiration of ten years from the date
it is granted; and
(ii) unless payment in full is made for the shares
being acquired thereunder at the time of exercise as provided
in subsection 6(i).
(e) The Committee shall determine in its discretion and
specify in each agreement evidencing a Stock Option the effect, if any,
the termination of the Participant's employment with or performance of
services for the Company shall have on the exercisability of the Stock
Option; provided, however, that an Incentive Stock Option shall not be
exercisable at a time that is beyond the time an Incentive Stock Option
may be exercised in order to qualify as such under the Code.
(f) In the case of an Incentive Stock Option, the amount of
the aggregate Fair Market Value of Common Shares (determined at the
time of grant of the Stock Option) with respect to which incentive
stock options are exercisable for the first time by an employee of the
Company during any calendar year (under all such plans of his employer
corporation and its parent and subsidiary corporations) shall not
exceed $100,000 or such other amount as is specified in the Code.
(g) It is the intent of the Company that Nonqualified Stock
Options granted under this Plan not be classified as Incentive Stock
Options, that the Incentive Stock Options granted under this Plan be
consistent with and contain or be deemed to contain all provisions
required under Section 422 and the other appropriate provisions of the
Code and any implementing regulations (and any successor provisions
thereof), and that any ambiguities in construction shall be interpreted
in order to effectuate such intent.
-3-
(h) A Purchased Option may contain such additional terms not
inconsistent with this Plan, including but not limited to the
circumstances under which the purchase price of such Purchased Option
may be returned to the holder of the Purchased Option, as the Committee
may determine in its sole discretion.
(i) For purposes of payments made to exercise Stock Options,
such payment shall be made in such form (including, but not limited to,
cash, Common Shares, the surrender of another outstanding Award under
this Plan or any combination thereof) as the Committee may determine in
its discretion; provided, however, that, unless the Committee
determines otherwise, for purposes of making such payment in Common
Shares, such shares shall be valued at their Fair Market Value on the
day of exercise and shall have been held by the Participant for a
period of at least six (6) months.
SECTION 7. STOCK APPRECIATION RIGHTS. The Committee may grant Stock
Appreciation Rights either alone, or in conjunction with Associated Awards,
either at the time of grant or by amendment thereafter. Each Award of Stock
Appreciation Rights granted under this Plan shall be evidenced by an agreement
in such form as the Committee shall prescribe from time to time in accordance
with this Plan and shall comply with the applicable terms and conditions of this
Section and this Plan, and with such other terms and conditions, including, but
not limited to, restrictions upon the Award of Stock Appreciation Rights or the
Common Shares issuable upon exercise thereof, as the Committee, in its
discretion, shall establish.
(a) The Committee shall determine the number of Common Shares
to be subject to each Award of Stock Appreciation Rights. In the case
of an Award of Stock Appreciation Rights awarded in conjunction with an
Associated Award, the number of Common Shares subject to an outstanding
Award of Stock Appreciation Rights may be reduced on an appropriate
basis to the extent that the Associated Award has been exercised, paid
to or otherwise received by the Participant, as determined by the
Committee.
(b) The Award of Stock Appreciation Rights shall not be
exercisable:
(i) unless the Associated Award, if any, is at the
time exercisable;
(ii) if the Associated Award is a Stock Option and
the Fair Market Value per share of the Common Shares on the
exercise date does not exceed the exercise price per share of
such Stock Option; and
(iii) if the Associated Award is an Incentive Stock
Option and the exercise of the Award of Stock Appreciation
Rights would disqualify the Incentive Stock Option as such
under the Code.
(c) The Committee shall determine in its discretion and
specify in each agreement evidencing an Award of Stock Appreciation
Rights the effect, if any, the termination of the Participant's
employment with or performance of services for the Company shall have
on the exercisability of the Award of Stock Appreciation Rights.
(d) An Award of Stock Appreciation Rights shall entitle the
holder to exercise such Award or to surrender unexercised an Associated
Award (or any portion of such Associated Award) to the Company and to
receive from the Company in exchange thereof, without payment to the
Company, that number of Common Shares having an aggregate value equal
to (or, in the
-4-
discretion of the Committee, less than) the excess of the Fair Market
Value of one share, at the time of such exercise, over the exercise
price, times the number of shares subject to the Award or the
Associated Award, or portion thereof, that is so exercised or
surrendered, as the case may be. The Committee shall be entitled in its
discretion to elect to settle the obligation arising out of the
exercise of a Stock Appreciation Right by the payment of cash or Other
Securities or property, or other forms of payment or any combination
thereof, as determined by the Committee, equal to the aggregate value
of the Common Shares it would otherwise be obligated to deliver. Any
such election by the Committee shall be made as soon as practicable
after the receipt by the Committee of written notice of the exercise of
the Stock Appreciation Right.
(e) A Stock Appreciation Right may provide that it shall be
deemed to have been exercised at the close of business on the business
day preceding the expiration date of the Stock Appreciation Right or of
the related Stock Option (or other Award), or such other date as
specified by the Committee, if at such time such Stock Appreciation
Right has a positive value. Such deemed exercise shall be settled or
paid in the same manner as a regular exercise thereof as provided in
subsection 7(d) of this Agreement.
SECTION 8. RESTRICTED STOCK. The Committee may grant Awards of
Restricted Stock either alone, or in conjunction with Associated Awards, either
at the time of grant or by amendment thereafter. Each Award of Restricted Stock
under this Plan shall be evidenced by an agreement in such form as the Committee
shall prescribe from time to time in accordance with this Plan and shall comply
with the applicable terms and conditions of this Section and this Plan, and with
such other terms and conditions as the Committee, in its discretion, shall
establish.
(a) The Committee shall determine the number of Common Shares
to be issued to a Participant pursuant to the Award of Restricted
Stock, and the extent, if any, to which they shall be issued in
exchange for cash, other consideration, or both.
(b) Until the expiration of such period as the Committee shall
determine from the date on which the Award is granted and subject to
such other terms and conditions as the Committee in its discretion
shall establish (the "RESTRICTED PERIOD"), a Participant to whom an
Award of Restricted Stock is made shall be issued, but shall not be
entitled to the delivery of, a stock certificate representing the
Common Shares subject to such Award.
(c) Unless otherwise determined by the Committee in its
discretion, a Participant to whom an Award of Restricted Stock has been
made (and any person succeeding to such a participant's rights pursuant
to this Plan) shall have, after issuance of a certificate for the
number of Common Shares awarded and prior to the expiration of the
Restricted Period, ownership of such Common Shares, including the right
to vote such Common Shares and to receive dividends or other
distributions made or paid with respect to such Common Shares (provided
that such Common Shares, and any new, additional or different shares,
or Other Securities or property, or other forms of consideration that
the Participant may be entitled to receive with respect to such Common
Shares as a result of a stock split, stock dividend or any other change
in the corporation or capital structure of the Company, shall be
subject to the restrictions set forth in this Plan as determined by the
Committee in its discretion), subject, however, to the options,
restrictions and limitations imposed thereon pursuant to this Plan.
(d) The Committee shall determine in its discretion and
specify in each agreement evidencing an Award of Restricted Stock the
effect, if any, the termination of the Participant's employment with or
performance of services for the Company during the Restricted Period
shall have on such Award of Restricted Stock.
-5-
SECTION 9. PERFORMANCE GRANTS. The Committee may grant Awards of
Performance Grants either alone, or in conjunction with Associated Awards,
either at the time of grant or by amendment thereafter. The Award of a
Performance Grant to a Participant will entitle him to receive a specified
amount determined by the Committee (the "ACTUAL VALUE"), if the terms and
conditions specified in this Plan and in the Award are satisfied. Each Award of
a Performance Grant shall be subject to the applicable terms and conditions of
this Section and this Plan, and to such other terms and conditions, including
but not limited to, restrictions upon any cash, Common Shares, Other Securities
or property, or other forms of payment, or any combination thereof, issued with
respect to the Performance Grant, as the Committee, in its discretion, shall
establish, and shall be embodied in an agreement in such form and substance as
is determined by the Committee.
(a) The Committee shall determine the value or range of values
of a Performance Grant to be awarded to each Participant selected for
an Award and whether or not such a Performance Grant is granted in
conjunction with an Associated Award. As determined by the Committee,
the maximum value of each Performance Grant (the "MAXIMUM VALUE") shall
be: (i) an amount fixed by the Committee at the time the Award is made
or amended thereafter, (ii) an amount that varies from time to time
based in whole or in part on the then current value of the Common
Shares, Other Securities or property, or other securities or property,
or any combination thereof or (iii) an amount that is determinable from
criteria specified by the Committee. Performance Grants may be issued
in different classes or series having different names, terms and
conditions. In the case of a Performance Grant awarded in conjunction
with an Associated Award, the Performance Grant may be reduced on an
appropriate basis to the extent that the Associated Award has been
exercised, paid to or otherwise received by the Participant, as
determined by the Committee.
(b) The award period ("AWARD PERIOD") related to any
Performance Grant shall be a period determined by the Committee. At the
time each Award is made, the Committee shall establish performance
objectives to be attained within the Award Period as the means of
determining the Actual Value of such a Performance Grant. The
performance objectives shall be based on such measure or measures of
performance, which may include, but need not be limited to, the
performance of the Participant, the Company or one or more of its
divisions or units, or any combination of the foregoing, as the
Committee shall determine, and may be applied on an absolute basis or
be relative to industry or other indices or any combination thereof.
The Actual Value of a Performance Grant shall be equal to its Maximum
Value only if the performance objectives are attained in full, but the
Committee shall specify the manner in which the Actual Value of
Performance Grants shall be determined if the performance objectives
are met in part. Such performance measures, the Actual Value or the
Maximum Value, or any combination thereof, may be adjusted in any
manner by the Committee in its discretion at any time and from time to
time during or as soon as practicable after the Award Period, if it
determines that such performance measures, the Actual Value or the
Maximum Value, or any combination thereof, are not appropriate under
the circumstances.
(c) The Committee shall determine in its discretion and
specify in each agreement evidencing a Performance Grant the effect, if
any, the termination of the Participant's employment with or
performance of services for the Company during the Award Period shall
have on such Performance Grant.
(d) The Committee shall determine whether the conditions of a
Performance Grant have been met and, if so, shall ascertain the Actual
Value of the Performance Grant. If the Performance Grant has no Actual
Value, the Award and such Performance Grant shall be deemed
-6-
to have been canceled and the Associated Award, if any, may be canceled
or permitted to continue in effect in accordance with its terms. If the
Performance Grant has any Actual Value and:
(i) was not awarded in conjunction with an Associated
Award, the Committee shall cause an amount equal to the Actual
Value of the Performance Grant earned by the Participant to be
paid to him or his permitted assignee or Beneficiary; or
(ii) was awarded in conjunction with an Associated
Award, the Committee shall determine, in accordance with
criteria specified by the Committee (A) to cancel the
Performance Grant, in which event no amount with respect
thereto shall be paid to the Participant or his permitted
assignee or Beneficiary, and the Associated Award may be
permitted to continue in effect in accordance with its terms,
(B) to pay the Actual Value of the Performance Grant to the
Participant or his permitted assignee or Beneficiary as
provided below, in which event the Associated Award may be
canceled or (C) to pay to the Participant or his Beneficiary,
the Actual Value of only a portion of the Performance Grants,
in which event all or a portion of the Associated Award may be
permitted to continue in effect in accordance with its terms
or be canceled, as determined by the Committee.
Such determination by the Committee shall be made as promptly
as practicable following the end of the Award Period or upon the
earlier termination of employment or performance of services, or at
such other time or times as the Committee shall determine, and shall be
made pursuant to criteria specified by the Committee.
(e) Payment of any amount with respect to the Performance
Grants that the Committee determines to pay as provided above shall be
made by the Company as promptly as practicable after the end of the
Award Period or at such other time or times as the Committee shall
determine, and may be made in cash, Common Shares, Other Securities or
property, or other forms of payment, or any combination thereof or in
such other manner, as determined by the Committee in its discretion.
Notwithstanding anything in this Section to the contrary, the Committee
may, in its discretion, determine and pay out the Actual Value of the
Performance Grants at any time during the Award Period.
SECTION 10. DEFERRAL OF COMPENSATION. The Committee shall determine
whether or not an Award shall be made in conjunction with the deferral of the
Participant's salary, bonus or other compensation, or any combination thereof,
and whether or not such deferred amounts may be:
(a) forfeited to the Company or to other Participants or any
combination thereof, under certain circumstances (which may include,
but need not be limited to, certain types of termination of employment
or performance of services for the Company);
(b) subject to increase or decrease in value based upon the
attainment of or failure to attain, respectively, certain performance
measures; and/or
(c) credited with income equivalents (which may include, but
need not be limited to, interest, dividends or other rates of return)
until the date or dates of payment of the Award, if any.
SECTION 11. DEFERRED PAYMENT OF AWARDS. The Committee may specify that
the payment of all or any portion of cash, Common Shares, Other Securities or
property, or any other form of payment, or any combination thereof, under an
Award shall be deferred until a later date. Deferrals shall be for such
-7-
periods or until the occurrence of such events, and upon such terms, as the
Committee shall determine in its discretion. Deferred payments of Awards may be
made by undertaking to make payment in the future based upon the performance of
certain investment equivalents (which may include, but need not be limited to,
government securities, Common Shares, other securities, property or
consideration, or any combination thereof), together with such additional
amounts of income equivalents (which may be compounded and may include, but need
not be limited to, interest, dividends or other rates of return or any
combination thereof) as may accrue thereon until the date or dates of payment,
such investment equivalents and such additional amounts of income equivalents to
be determined by the Committee in its discretion.
SECTION 12. TRANSFERABILITY OF AWARDS. A Participant's rights and
interest under this Plan or any Award may not be assigned or transferred,
hypothecated or encumbered in whole or in part either directly or by operation
of law or otherwise, including, but not by way of limitation, execution, levy,
garnishment, attachment, pledge, bankruptcy or in any other manner; provided,
however, the Committee may permit such transfer to a Permitted Transferee; and
provided, further, that, unless otherwise permitted by the Code, any Incentive
Stock Option granted pursuant to this Plan shall not be transferable other than
by will, by the laws of descent and distribution, and shall be exercisable
during the Participant's lifetime only by Participant or by such Permitted
Transferee.
SECTION 13. AMENDMENT OR SUBSTITUTION OF AWARDS UNDER THIS PLAN. The
terms of any outstanding Award under this Plan may be amended or modified from
time to time by the Committee in its discretion in any manner that it deems
appropriate (including, but not limited to, acceleration of the date of exercise
of any Award and/or payments thereunder) if the Committee could grant such
amended or modified Award under the terms of this Plan at the time of such
amendment or modification; provided that no such amendment or modification shall
adversely affect in a material manner any right of a Participant under the Award
without his written consent, unless the Committee determines in its discretion
that there have occurred or are about to occur significant changes in the
Participant's position, duties or responsibilities, or significant changes in
economic, legislative, regulatory, tax, accounting or cost/benefit conditions
that are determined by the Committee in its discretion to have or to be expected
to have a substantial effect on the performance of the Company, or any
affiliate, division or department thereof, on this Plan or on any Award under
this Plan. The Committee may, in its discretion, permit holders of Awards under
this Plan to surrender outstanding Awards in order to exercise or realize the
rights under other Awards, or in exchange for the grant of new Awards, or
require holders of Awards to surrender outstanding Awards as a condition
precedent to the grant of new Awards under this Plan.
SECTION 14. TERMINATION OF A PARTICIPANT. For all purposes under this
Plan, the Committee shall determine whether a Participant has terminated
employment with, or the performance of services for, the Company; provided,
however, an absence or leave approved by the Company, to the extent permitted by
applicable provisions of the Code, shall not be considered an interruption of
employment or performance of services for any purpose under this Plan.
SECTION 15. DILUTION AND OTHER ADJUSTMENTS. If any change in the
outstanding Common Shares of the Company occurs by reason of any stock split of
or stock dividend on the Common Shares, then, except as otherwise determined by
the Committee, the terms of any outstanding Awards and the number of Common
Shares available for Awards shall be equitably adjusted. If any change in the
outstanding Common Shares occurs by reason of any split-up, split-off, spin-off,
recapitalization, merger, consolidation, rights offering, reorganization,
combination or exchange of shares, sale by the Company of all of its assets,
distribution to shareholders (other than a stock dividend or a normal cash
dividend on the Common Shares), or other extraordinary or unusual event (other
than a stock split of the Common Stock as provided above), then the Committee
may determine, in its discretion, to terminate all outstanding Awards
immediately prior to the consummation of any such event, or make an equitable
adjustment in the
-8-
terms of any outstanding Award and/or the number of Common Shares available for
Awards. Any such termination or adjustment made by the Committee shall be final,
conclusive and binding for all purposes of the Plan. Unless otherwise provided
by the Committee, all outstanding Awards shall terminate immediately prior to
the consummation of any dissolution or liquidation of the Company.
SECTION 16. DESIGNATION OF BENEFICIARY BY PARTICIPANT. A Participant
may name a beneficiary to receive any payment to which he may be entitled with
respect to any Award under this Plan in the event of his death, on a written
form to be provided by and filed with the Committee, and in a manner determined
by the Committee in its discretion (a "BENEFICIARY"). The Committee reserves the
right to review and approve Beneficiary designations. A Participant may change
his Beneficiary from time to time in the same manner, unless such Participant
has made an irrevocable designation. Any designation of a Beneficiary under this
Plan (to the extent it is valid and enforceable under applicable law) shall be
controlling over any other disposition, testamentary or otherwise, as determined
by the Committee in its discretion. If no designated Beneficiary survives the
Participant and is living on the date on which any amount becomes payable to
such a Participant's Beneficiary, such payment will be made to the legal
representatives of the Participant's estate, and the term "BENEFICIARY" as used
in this Plan shall be deemed to include such person or persons. If there are any
questions as to the legal right of any Beneficiary to receive a distribution
under this Plan, the Committee in its discretion may determine that the amount
in question be paid to the legal representatives of the estate of the
Participant, in which event the Company, the Board, the Committee, the
Designated Administrator (if any), and the members thereof, will have no further
liability to anyone with respect to such amount.
SECTION 17. FINANCIAL ASSISTANCE. If the Committee determines that such
action is advisable, the Company may assist any Participant in obtaining
financing from the Company (or under any program of the Company approved
pursuant to applicable law), or from a bank or other third party, on such terms
as are determined by the Committee, and in such amount as is required to
accomplish the purposes of this Plan, including, but not limited to, to permit
the exercise of an Award, the participation therein, and/or the payment of any
taxes with respect thereto. Such assistance may take any form that the Committee
deems appropriate, including, but not limited to, a direct loan from the
Company, a guarantee of the obligation by the Company or the maintenance by the
Company of deposits with such bank or third party.
SECTION 18. MISCELLANEOUS PROVISIONS.
(a) Any proceeds from Awards shall constitute general funds of
the Company.
(b) Except as otherwise determined by the Committee,
fractional shares may be delivered under an Award, or in lieu thereof a
cash or other adjustment may be made as determined by the Committee in
its discretion.
(c) No Eligible Person or other person shall have any claim or
right to be granted an Award under this Plan. Determinations made by
the Committee under this Plan need not be uniform and may be made
selectively among Eligible Persons under this Plan, whether or not such
Eligible Persons are similarly situated. Neither this Plan nor any
action taken hereunder shall be construed as giving any Eligible Person
any right to continue to be employed by or perform services for the
Company, and the right to terminate the employment of or performance of
services by Eligible Persons at any time and for any reason is
specifically reserved.
(d) No Participant or other person shall have any right with
respect to this Plan, the Common Shares reserved for issuance under
this Plan or in any Award, contingent or otherwise, until written
evidence of the Award shall have been delivered to the recipient and
all the terms,
-9-
conditions and provisions of this Plan and the Award applicable to such
recipient (and each person claiming under or through him) have been
met.
(e) No Common Shares, Other Securities or property, or other
forms of payment shall be issued hereunder with respect to any Award
unless counsel for the Company shall be satisfied that such issuance
will be in compliance with applicable law and any applicable rules of
any stock exchange or other market quotation system on which Common
Shares are listed.
(f) It is the intent of the Company that this Plan comply in
all respects with Rule 16b-3 and Section 162(m) with respect to Awards
granted to executive officers of the Company, that any ambiguities or
inconsistencies in construction of this Plan be interpreted to give
effect to such intention and that if any provision of this Plan is
found not to be in compliance with Rule 16b-3 or Section 162(m), such
provision shall be deemed null and void with respect to Awards granted
to executive officers of the Company to the extent required to permit
such Awards to comply with Rule 16b-3 and Section 162(m). It is also
the intent of the Company that this Plan comply in all respects with
the provisions of the Code providing favorable treatment to Incentive
Stock Options, that any ambiguities or inconsistencies in construction
of this Plan be interpreted to give effect to such intention and that
if any provision of this Plan is found not to be in compliance with the
Incentive Stock Option provisions of the Code, such provision shall be
deemed null and void with respect to Incentive Stock Options granted to
employees of the Company to the extent required to permit such
Incentive Stock Options to receive favorable treatment under the Code.
(g) The Company shall have the right to deduct from any
payment made under this Plan any federal, state, local or foreign
income or other taxes required by law to be withheld with respect to
such payment. It shall be a condition to the obligation of the Company
to issue Common Shares, Other Securities or property, or other forms of
payment, or any combination thereof, upon exercise, settlement or
payment of any Award under this Plan, that the Participant (or any
Beneficiary or person entitled to act) pay to the Company, upon its
demand, such amount as may be required by the Company for the purpose
of satisfying any liability to withhold federal, state, local or
foreign income or other taxes. If the amount requested is not paid, the
Company may refuse to issue Common Shares, Other Securities or
property, or other forms of payment, or any combination thereof.
Notwithstanding anything in this Plan to the contrary, the Committee
may, in its discretion, permit an Eligible Person (or any Beneficiary
or person entitled to act) to elect to pay a portion or all of the
amount requested by the Company for such taxes with respect to such
Award, at such time and in such manner as the Committee shall deem to
be appropriate (including, but not limited to, by authorizing the
Company to withhold, or agreeing to surrender to the Company on or
about the date such tax liability is determinable, Common Shares, Other
Securities or property, or other forms of payment, or any combination
thereof, owned by such person or a portion of such forms of payment
that would otherwise be distributed, or have been distributed, as the
case may be, pursuant to such Award to such person, having a Fair
Market Value equal to the amount of such taxes).
(h) The expenses of this Plan shall be borne by the Company;
provided, however, the Company may recover from a Participant or his
Beneficiary, heirs or assigns any and all damages, fees, expenses and
costs incurred by the Company arising out of any actions taken by a
Participant in breach of this Plan or any agreement evidencing such
Participant's Award.
(i) This Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any
-10-
Award under this Plan, and rights to the payment of Awards shall be no
greater than the rights of the Company's general creditors.
(j) By accepting any Award or other benefit under this Plan,
each Participant and each person claiming under or through him shall be
conclusively deemed to have indicated his acceptance and ratification
of, and consent to, any action taken under this Plan by the Company,
the Board, the Committee or the Designated Administrator (if
applicable).
(k) The appropriate officers of the Company shall cause to be
filed any reports, returns or other information regarding Awards
hereunder of any Common Shares issued pursuant hereto as may be
required by applicable law and any applicable rules of any stock
exchange or other market quotation system on which Common Shares are
listed.
(l) The validity, construction, interpretation, administration
and effect of this Plan, and of its rules and regulations, and rights
relating to this Plan and to Awards granted under this Plan, shall be
governed by the substantive laws, but not the choice of law rules, of
the State of Colorado.
(m) Records of the Company shall be conclusive for all
purposes under this Plan or any Award, unless determined by the
Committee to be incorrect.
(n) If any provision of this Plan or any Award is held to be
illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining provisions of this Plan or any Award, but such
provision shall be fully severable, and this Plan or Award, as
applicable, shall be construed and enforced as if the illegal or
invalid provision had never been included in this Plan or Award, as
applicable.
(o) The terms of this Plan shall govern all Awards under this
Plan and in no event shall the Committee have the power to grant any
Award under this Plan that is contrary to any of the provisions of this
Plan.
(p) For purposes of interpretation of this Plan, the masculine
pronoun includes the feminine and the singular includes the plural
wherever appropriate.
SECTION 19. PLAN AMENDMENT OR SUSPENSION. The Board at any time, and
from time to time, may amend or suspend the Plan. However, except as provided in
Section 15 relating to adjustments upon changes in Common Stock, no amendment
shall be effective unless approved by the shareholders of the Company to the
extent shareholder approval is necessary to satisfy the requirements of Section
422 of the Code, Rule 16b-3 or any Nasdaq or securities exchange listing
requirements. No amendment of this Plan shall adversely affect in a material
manner any right of any Participant with respect to any Award previously granted
without such Participant's written consent, except as permitted under Section
13.
SECTION 20. PLAN TERMINATION. This Plan shall terminate upon the
earlier of the following dates or events to occur:
(a) upon the adoption of a resolution of the Board terminating
this Plan; or
(b) the tenth anniversary of the Effective Date; provided,
however, that the Board may, prior to such date, extend the term of
this Plan for an additional period of up to five years for the grant of
Awards other than Incentive Stock Options. No termination of this Plan
shall materially alter or impair any of the rights or obligations of
any person, without his consent,
-11-
under any Award previously granted under this Plan, except that
subsequent to termination of this Plan, the Committee may make
amendments or modifications permitted under Section 13.
SECTION 21. EFFECTIVE DATE. This Plan shall be effective, and Awards
may be granted under this Plan, on or after the Effective Date.
ADOPTED BY THE BOARD: AUGUST 24, 2001
EFFECTIVE DATE: AUGUST 24, 2001
EXECUTED to evidence this Colorado MEDtech, Inc. 2001 Long-Term
Incentive Plan adopted by the Board on August 24, 2001.
COLORADO MEDTECH, INC.
By: /s/ Peter J. Jensen
Peter J. Jensen, Secretary
-12-
APPENDIX A
The following terms shall have the meaning indicated:
(a) "ACTUAL VALUE" has the meaning set forth in Section 9.
(b) "ASSOCIATED AWARD" shall mean an Award granted
concurrently or subsequently in conjunction with another Award.
(c) "AWARD" shall mean an award of rights to an Eligible
Person under this Plan.
(d) "AWARD PERIOD" has the meaning set forth in subsection
9(b).
(e) "BENEFICIARY" has the meaning set forth in Section 16.
(f) "BOARD" shall mean the board of directors of the Company.
(g) "CODE" shall mean the Internal Revenue Code of 1986, as it
now exists or may be amended from time to time, and the rules and
regulations promulgated thereunder, as they may exist or may be amended
from time to time.
(h) "COMMITTEE" shall mean the person or persons responsible
for administering the Plan. The Board shall constitute the Committee
until the Board appoints a Board Committee, after which time the Board
Committee shall constitute the Committee, provided, however, that at
any time the Board may designate itself as the Committee or designate
itself to administer certain of the Committee's authority under the
Plan, including administering certain Awards under the Plan. The Board
or the Board Committee may designate a Designated Administrator to
constitute the Committee or to administer certain of the Committee's
authority under the Plan, including administering certain Awards under
the Plan, subject to the right of the Board or the Board Committee, as
applicable, to revoke its designation at any time and to make such
designation on such terms and conditions as it may determine in its
discretion. For purposes of this definition, the "BOARD COMMITTEE"
shall mean a committee of the Board designated by the Board to
administer this Plan. Except as otherwise determined by the Board, the
Board Committee (i) shall be comprised of not fewer than two directors,
(ii) shall meet any applicable requirements under Rule 16b-3, including
any requirement that the Board Committee consist of "nonemployee
directors" (as defined in Rule 16b-3), (iii) shall meet any applicable
requirements under Section 162(m), including any requirement that the
Board Committee consist of "outside directors" (as defined in Treasury
Regulation Section 1.162-27(e)(3)(i) or any successor regulation), and
(iv) shall meet any applicable requirements of any stock exchange or
other market quotation system on which Common Shares are listed. For
purposes of this definition, the "DESIGNATED ADMINISTRATOR" shall mean
a person or person designated by the Board or a Board Committee to act
as a Designated Administrator pursuant to this Plan. Except as
otherwise determined by the Board, a Designated Administrator shall
only be appointed if Rule 16b-3 permits such appointment and the
exercise of any authority without adversely affecting the ability of
Awards to officers of the Company to comply with the conditions for
Rule 16b-3 or Section 162(m).
(i) "COMPANY" shall mean Colorado MEDtech, Inc. and any
parent, subsidiary or affiliate of Colorado MEDtech, Inc.
-13-
(j) "COMMON SHARES" shall mean shares of common stock, no par
value per share, of the Company and stock of any other class into which
such shares may thereafter be changed.
(k) "EFFECTIVE DATE" shall mean the date the Board adopts this
Plan.
(l) "ELIGIBLE PERSON(S)" shall mean those persons who are full
or part-time employees of the Company or other individuals who perform
services for the Company, including, without limitation, directors who
are not employees of the Company and consultants and independent
contractors who perform services for the Company.
(m) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as it now exists or may be amended from time to time, and the
rules promulgated thereunder, as they may exist or may be amended from
time to time.
(n) "FAIR MARKET VALUE" shall mean such value rounded up to
the nearest cent as determined by the Committee in accordance with
applicable law.
(o) "INCENTIVE STOCK OPTION" shall mean a Stock Option that is
an incentive stock option as defined in Section 422 of the Code.
Incentive Stock Options are subject, in part, to the terms, conditions
and restrictions described in Section 6.
(p) "MAXIMUM VALUE" has the meaning set forth in subsection
9(a).
(q) "NONQUALIFIED STOCK OPTION" shall mean a Stock Option that
is not an incentive stock option as defined in Section 422 of the Code.
Nonqualified Stock Options are subject, in part, to the terms,
conditions and restrictions described in Section 6.
(r) "OTHER SECURITIES" shall mean securities the Company
(which may include, but need not be limited to, unbundled stock units
or components thereof, debentures, preferred stock, warrants,
securities convertible into Common Shares or other property) other than
Common Shares.
(s) "PARTICIPANT" shall mean an Eligible Person to whom an
Award has been granted under this Plan.
(t) "PERFORMANCE GRANT" shall mean an Award subject, in part,
to the terms, conditions and restrictions described in Section 9,
pursuant to which the recipient may become entitled to receive cash,
Common Shares, Other Securities or property, or other forms of payment,
or any combination thereof, as determined by the Committee.
(u) "PERMITTED TRANSFEREE" means (i) any person defined as an
employee in the Instructions to Registration Statement Form S-8
promulgated by the Securities and Exchange Commission, as such Form may
be amended from time to time, which persons include, as of the date of
adoption of the Plan, (a) executors, administrators or beneficiaries of
the estates of deceased Participants, guardians or members of a
committee for incompetent former Participants, or similar persons duly
authorized by law to administer the estate or assets of former
Participants, and (b) Participants' family members who acquire Awards
from the Participant other than for value, through a gift or a domestic
relations order. For purposes of this definition, "FAMILY MEMBER"
includes any child, stepchild, grandchild, parent, stepparent,
grandparent, spouse, former spouse, sibling, niece, nephew,
mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law, or sister-in-law, including adoptive relationships, any
person sharing the
-14-
Participant's household (other than a tenant or employee), a trust in
which these persons have more than fifty percent of the beneficial
interest, a foundation in which these persons (or the Participant)
control the management of assets, and any other entity in which these
persons (or the Participant) own more than fifty percent of the voting
interests. For purposes of this definition, neither (i) a transfer
under a domestic relations order in settlement of marital property
rights; nor (ii) a transfer to an entity in which more than fifty
percent of the voting interests are owned by family members (or the
Participant) in exchange for an interest in that entity is considered a
transfer for "VALUE".
(v) "PLAN" shall mean this Colorado MEDtech, Inc. 2001
Long-Term Incentive Plan.
(w) "PURCHASED OPTION" shall mean a Stock Option that is sold
to an Eligible Person at a price determined by the Committee. Purchased
Options are subject, in part, to the terms, conditions and restrictions
described in Section 6.
(x) "RESTRICTED PERIOD" has the meaning set forth in
subsection 8(b).
(y) "RESTRICTED STOCK" shall mean an Award of Common Shares
that are issued subject, in part, to the terms, conditions and
restrictions described in Section 8.
(z) "RULE 16b-3" shall mean Rule 16b-3 promulgated by the
Securities and Exchange Commission under the Exchange Act and any
successor rule.
(aa) "SECTION 162(m)" shall mean Section 162(m) of the Code,
any rules or regulations promulgated thereunder, as they may exist or
may be amended from time to time, or any successor to such section.
(bb) "STOCK APPRECIATION RIGHT" shall mean an Award of a right
to receive (without payment to the Company) cash, Common Shares, Other
Securities or property, or other forms of payment, or any combination
thereof, as determined by the Committee, based on the increase in the
value of the number of Common Shares specified in the Stock
Appreciation Right. Stock Appreciation Rights are subject, in part, to
the terms, conditions and restrictions described in Section 7.
(cc) "STOCK OPTION" shall mean an Award of a right to purchase
Common Shares. The term Stock Option shall include Nonqualified Stock
Options, Incentive Stock Options and Purchased Options.
(dd) "TEN PERCENT EMPLOYEE" shall mean an employee of the
Company who owns stock representing more than ten percent of the voting
power of all classes of stock of the Company or any parent or
subsidiary of the Company.
(ee) "TREASURY REGULATION" shall mean a final, proposed or
temporary regulation of the Department of Treasury under the Code and
any successor regulation.
-15-