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Exhibit 10.4
RENEX CORP.
DIRECTORS' STOCK OPTION PLAN
ARTICLE I
PURPOSE
The purpose of the RENEX CORP. Directors' Stock Option Plan (the
"Plan") is to secure for RENEX CORP. and its stockholders the benefits arising
from stock ownership by its Directors. The Plan will provide a means whereby
eligible Directors may purchase shares of the common stock, $.001 par value, of
RENEX CORP. pursuant to options granted in accordance with the Plan.
ARTICLE II
DEFINITIONS
The following capitalized terms used in the Plan shall have the
respective meanings set forth in this Article:
2.1 "Annual Grant Date" shall mean the anniversary date of the Initial
Grant Date of each calendar year after 1994 during the term of the Plan or the
nearest preceding business day if such anniversary date falls on a weekend or
holiday.
2.2 "Board" shall mean the Board of Directors of RENEX CORP.
2.3 "Chairman" shall mean the duly appointed Chairman of any standing
Committee of the Board.
2.4 "Change of Control" shall mean the occurrence of any of the
following acts:
(a) The acquisition, other than (i) from the Company directly or
(ii) by any shareholder who at the time of Board adoption of the Plan owns in
excess of 10% of the outstanding Common Stock, by any person, entity or group,
within the meaning of ss.13(d) or 14(d) of the Exchange Act, of beneficial
ownership of twenty-five (25%) percent or more of the outstanding Common Stock;
(b) If the individuals who serve on the Board as of the date of
stockholder approval of the Plan, no longer constitute a majority of the members
of the Board; provided, however, any person who becomes a director subsequent to
the date of the stockholder approval of the Plan, who was elected to fill a
vacancy by a majority of the individuals then serving on the Board, shall be
considered as if a member prior to stockholder approval of the Plan;
(c) Approval by a majority of the voting stock of the Company of a
merger, reorganization or consolidation whereby the stockholders of the Company
immediately prior to such approval do not, immediately after consummation of
such reorganization merger or consolidation own more than 50% of the voting
stock of the surviving entity; or
(d) A liquidation or dissolution of the Company, or the sale of
all or substantially all of the Company's assets.
2.5 "Committee" shall mean a duly appointed standing committee of the
Board.
2.6 "Common Stock" shall mean the common stock, $.001 par value of the
Company.
2.7 "Company" shall mean RENEX CORP. and any subsidiaries.
2.8 "Director" shall mean any person who is a member of the Board of
Directors of the Company.
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2.9 "Eligible Director" shall be any Director who is not a full or
part-time employee of the Company.
2.10 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended and the rules and regulations promulgated thereunder.
2.11 "Exercise Price" shall mean the price per share at which an Option
may be exercised.
2.12 "Fair Market Value" shall mean the closing price of a share of
Common Stock on the principal securities exchange on which such Common Stock is
traded on the last preceding business day prior to the date as to which Fair
Market Value is being determined, or on the next preceding business day on which
such Common Stock is traded, if no shares of Common Stock were traded on such
date. If the Common Stock is not traded on a securities exchange, Fair Market
Value shall be the closing sales price of the Common Stock as reported on the
NASDAQ-National Market System for the last preceding business day prior to the
date on which Fair Market Value is to be determined or on the next preceding
business day if the Common Stock was not traded on such date. If the Common
Stock is not quoted on the NASDAQ-National Market System, Fair Market Value
shall be the average of the high bid and low asked prices of the Common Stock in
the over-the-counter market on the last preceding business day prior to the day
as of which Fair Market Value is being determined, or on the next preceding day
on which such high bid and low asked prices were recorded. If the Common Stock
is not publicly traded, Fair Market Value shall be determined by the Board, in
good faith, but only during any period in which no equity security of the
Company's is registered pursuant to ss. 12 of the Exchange Act. In no case shall
Fair Market Value be less than the par value per share of the Common Stock. Fair
market value shall be determined without regard to any restriction other than a
restriction which, by its terms, will never lapse.
2.13 "Grant Date" shall mean the Initial Grant Date or the Annual Grant
Date as appropriate.
2.14 "Initial Grant Date" shall mean with respect to each Eligible
Director, the latter of (i) the date such Eligible Director is first elected as
a member of the Board, and (ii) the date on which the plan is approved by the
Company's Shareholders.
2.15 "Option" shall mean an Option, including a Reload Option, to
purchase shares of Common Stock granted pursuant to the Plan.
2.16 "Option Agreement" shall mean the written agreement described in
Article VI herein.
2.17 "Permanent Disability" shall mean the condition of an Eligible
Director who is unable to participate as a member of the Board by reason of any
medically determined physical or mental impairment which can be expected to
result in death or which can be expected to last for a continuous period of not
less than twelve (12) months.
2.18 "Purchase Price" shall be the Exercise Price multiplied by the
number of whole shares of Common Stock with respect to which an Option may be
exercised.
2.19 "Plan" shall mean this RENEX CORP. Directors' Stock Option Plan.
2.20 "Reload Option" means an option granted to an Eligible Director
equal to the number of shares of Common Stock delivered by the Eligible Director
to pay for the exercise of an option as more fully described in Article XIII -
RELOAD OPTIONS.
ARTICLE III
ADMINISTRATION
3.1 General. This Plan shall be administered by the Board in accordance
with the express provisions of this Plan, subject to the restrictions contained
in ss.16 of the Exchange Act.
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3.2 Powers of the Board. The Board shall have full and complete
authority to adopt such rules and regulations and to make all such other
determinations not inconsistent with the Plan or ss.16 of the Exchange Act (once
the Common Stock is registered pursuant to ss.12 of the Exchange Act), as may be
necessary for the administration of the Plan.
3.3 Section 16 Compliance. It is the intention of the Company that the
Plan, and the administration of the Plan (once the Company's Common Stock is
registered pursuant to ss.12 of the Exchange Act) comply in all respects with
ss.16 of the Exchange Act and the rules and regulations promulgated thereunder.
If any Plan provision, or any aspect of the administration of the Plan, is found
not to be in compliance with ss.16 of the Exchange Act, the provision or
administration shall be deemed null and void, and in all events the Plan shall
be construed in favor of its meeting the requirements of Rule 16b-3 promulgated
under the Exchange Act.
ARTICLE IV
SHARES SUBJECT TO PLAN
Subject to adjustment in accordance with Articles IX and XII an
aggregate of 500,000 shares of Common Stock are reserved for issuance under the
Plan. Shares of Common Stock reserved under this Plan may be either authorized,
but unissued shares of Common Stock or reacquired shares of Common Stock. If an
Option, or any portion thereof, shall expire or terminate for any reason without
having been exercised in full, the unpurchased shares of Common Stock covered by
such Option shall be available for future grants of Options. Any shares of
Common Stock used to pay the purchase price of any options in connection with
Article XIII shall be added to the shares of Common Stock reserved for issuance
under the Plan.
ARTICLE V
NON-DISCRETIONARY GRANTS
5.1 Initial Grants. On the Initial Grant Date, each Eligible Director
shall receive the grant of an option to purchase 2,500 shares of Common Stock.
5.2 Annual Grants. On each Annual Grant Date, each Eligible Director
shall receive the grant of an Option to purchase 2,500 shares of Common Stock.
5.3 Committee Service. Each Eligible Director who serves on a
Committee, other than the Executive Committee, shall receive the grant of
additional Options to purchase 1,000 shares of Common Stock on the Initial Grant
Date and each Annual Grant Date, for each Committee he serves on as of the Grant
date. Service on the Executive Committee shall entitle an Eligible Director to
receive Options to purchase 2,500 shares of Common Stock on the initial Grant
Date and each Annual Grant Date. The grant of Options pursuant to this Section
5.3 shall be in addition to the grant of Options contained in Sections 5.1 and
5.2, respectively.
5.4 Chairman of Committee. Each Eligible Director who serves as a
Chairman of a Committee as of a Grant Date, other than the Chairman of the
Executive Committee, shall receive an additional grant of Options to purchase
1,000 shares of Common Stock for each Chairmanship, on the Initial Grant Date
and each Annual Grant Date. Service as Chairman of the Executive Committee shall
entitle an Eligible Director to receive additional Options to purchase 2,500
shares of Common Stock on the Initial Grant Date and each Annual Grant Date. The
grant of Options pursuant to this Section 5.4 shall be in addition to the grant
of Options contained in Sections 5.1, 5.2 and 5.3, respectively.
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ARTICLE VI
TERMS OF OPTION
Each Option shall be evidenced by a written Option Agreement executed
by the Company and the Eligible Director which shall specify the Grant Date, the
number of shares of Common Stock subject to the Option, the Exercise Price and
shall also include or incorporate by reference the substance of all of the
following provisions and such other provisions consistent with this Plan as the
Board may determine:
6.1 Term. The term of the Option shall be five (5) years from the Grant
Date of each Option, subject to earlier termination in accordance with Articles
VI and X of the Plan.
6.2 Restriction on Exercise. No Option shall be exercisable until six
(6) months after the Grant Date, except in the case of the Eligible Director's
death or permanent disability, upon which events the Option will become
immediately exercisable. Thereafter, an Option, or any portion thereof, may be
exercised until the earlier of the expiration of the option's term or
termination of the Option in accordance with this Article VI.
6.3 Exercise Price. The Exercise Price for each share of Common Stock
subject to an Option shall be the Fair Market Value of the Common Stock as
determined in Section 2.12 herein.
6.4 Manner of Exercise. An option shall be exercised in accordance with
its terms, by delivery of a written notice of exercise to the Company and
payment of the full purchase price of the shares of Common Stock being
purchased. An Eligible Director may exercise an Option with respect to all or
less than all of the shares of Common Stock for which the Option may then be
exercised, but an eligible Director must exercise the Option in full shares of
Common Stock.
6.5 Payment. The Purchase Price pursuant to an Option or portion
thereof, may be paid:
(a) in United States dollars, in cash or by check, bank draft or
money order payable to the Company; or
(b) by delivery of shares of Common Stock owned by an Eligible
Director which has an aggregate Fair Market Value on the date of exercise equal
to the purchase price, subject to the provisions of ss.16(b) of the Exchange Act
and the rules and regulations promulgated thereunder; or
(c) to the extent authorized by the Board, or if specified in the
Option being exercised, by a promissory note from Optionee to the Company, upon
such terms and conditions determined by the Board and secured by the Common
Stock issuable upon exercise of the Option; or
(d) by any combination of the above methods of payment.
6.6 Transferability. No Option shall be transferable otherwise than by
will or the laws of descent and distribution, and an Option shall be exercisable
during the Eligible Director's lifetime only by the Eligible Director, his
guardian or legal representative.
6.7 Termination of Membership on the Board. If an Eligible Director's
membership on the Board terminates for any reason, an Option held on the date of
termination may be exercised in whole or in part at any time within one (1) year
after the date of such termination (but in no event after the actual expiration
of the term of the Option) and shall thereafter terminate.
ARTICLE VII
GOVERNMENT AND OTHER REGULATIONS
7.1 Delivery of Common Stock. The obligation of the Company to issue or
transfer and deliver shares of Common Stock for exercised Options under the Plan
shall be subject to all applicable laws, regulations, rules, orders and
approvals which shall then be in effect.
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7.2 Holding of Stock After Exercise of Option. The Option Agreement
shall provide that the Eligible Director, by accepting such option, represents
and agrees, for the Eligible Director and his permitted transferees that none of
the shares of Common Stock purchased upon exercise of the Option shall be
acquired with a view to any sale, transfer or distribution of the Common Stock
in violation of the Securities Act of 1933, as amended (the "Act") and the
person exercising an Option shall furnish evidence satisfactory to that Company
to that effect, including an indemnification of the Company in the event of any
violation of the Act by such person.
ARTICLE VIII
WITHHOLDING TAX
The Company may, in its discretion, require an Eligible Director to pay
to the Company, at the time of exercise of an Option an amount that the Company
deems necessary to satisfy its obligations, if any, to withhold federal, state
or local income or other taxes (which for purposes of this Article VIII includes
an Eligible Director's FICA obligation) incurred by reason of such exercise.
When the exercise of an Option does not give rise to the obligation to withhold
federal income taxes on the date of exercise, the Company may, in its
discretion, require an Eligible Director to place shares of Common Stock
received upon exercise of the Option in escrow for the benefit of the Company
until such time as federal income tax withholding is required on amounts
included in the Eligible Director's gross income as a result of the exercise of
an Option. At such time, the Company, in its discretion, may require an Eligible
Director to pay to the Company an amount that the Company deems necessary to
satisfy its obligation to withhold federal, state or local taxes incurred by
reason of the exercise of the Option, in which case the shares of Common Stock
will be released from escrow upon such payment by an Eligible Director.
ARTICLE IX
ADJUSTMENTS
9.1 Proportionate Adjustments. If the outstanding shares of Common
Stock are increased, decreased, changed into or exchanged into a different
number or kind of shares of Common Stock or securities of the Company through
reorganization, recapitalization, reclassification, stock dividend, stock split,
reverse stock split or other similar transaction, an appropriate and
proportionate adjustment shall be made to the maximum number and kind of shares
of Common Stock as to which Options may be granted under this Plan. A
corresponding adjustment changing the number or kind of shares of Common Stock
allocated to unexercised Options or portions thereof, which shall have been
granted prior to any such change, shall likewise be made. Any such adjustment in
the outstanding Options shall be made without change in the Purchase Price
applicable to the unexercised portion of the Option with a corresponding
adjustment in the Exercise Price of the shares of Common Stock covered by the
Option. Notwithstanding the foregoing, there shall be no adjustment for the
issuance of shares of Common Stock on conversion of notes, preferred stock or
exercise of warrants or shares of Common Stock issued by the Board for such
consideration as the Board deems appropriate.
9.2 Dissolution or Liquidation. Upon the dissolution or liquidation of
the Company, or upon a reorganization, merger or consolidation of the Company
with one or more corporations as a result of which the Company is not the
surviving corporation, or upon a sale of substantially all of the property or
more than 50% of the then outstanding shares of Common Stock of the Company to
another corporation, the Company shall give to each Eligible Director at the
time of adoption of the plan for liquidation, dissolution, merger or sale either
(1) a reasonable time thereafter within which to exercise the Option prior to
the effective date of such liquidation or dissolution, merger or sale, or (2)
the right to exercise the Option as to an equivalent number of shares of Common
Stock of the corporation succeeding the Company or acquiring its business by
reason of such liquidation, dissolution, merger, consolidation or
reorganization.
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ARTICLE X
AMENDMENT OR TERMINATION OF PLAN
10.1 Amendments. The Board may at any time amend or revise the terms of
the Plan, provided no such amendment or revision shall, unless appropriate
stockholder approval of such amendment or revision is obtained:
(a) materially increase the maximum number of shares of Common
Stock which may be sold pursuant to Options granted under the Plan;
(b) materially increase the benefits accruing to participants under
the Plan;
(c) materially modify the requirements as to eligibility for
participants in the Plan.
10.2 Termination. The Board may suspend or terminate this Plan at any
time. This Plan, unless sooner terminated, shall terminate on the tenth (10th)
anniversary of its adoption by the Board. No Option may be granted under this
Plan, while this Plan is suspended or after it is terminated.
10.3 Holder of Consent. No amendment, suspension or termination of the
Plan shall, without the consent of the holder of Options, alter or impair any
rights or obligations under any Option theretofore granted under the Plan.
ARTICLE XI
MISCELLANEOUS PROVISIONS
11.1 Privilege of Stock Ownership. No Eligible Director entitled to
exercise any Option granted under the Plan shall have any of the rights or
privileges of a stockholder of the Company with respect to any shares of Common
Stock issuable upon exercise of an Option until certificates representing the
shares of Common Stock shall have been issued and delivered.
11.2 Plan Expenses. Any expenses incurred in the administration of the
Plan shall be borne by the Company.
11.3 Use of Proceeds. Payments received from an Eligible Director upon
the exercise of Options shall be used for general corporate purposes of the
Company.
11.4 Governing Law. The Plan has been adopted under the laws of the
State of Delaware. The Plan and all Options which may be granted hereunder and
all matters related thereto, shall be governed by and construed and enforceable
in accordance with the laws of the State of Delaware as it then exists.
11.5 Gender and Number. Except as otherwise indicated by the context,
reference to the masculine gender shall include the feminine gender, the plural
shall include the singular and the singular shall include the plural.
11.6 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Plan and the Plan shall be construed and enforced as
if the illegal or invalid provision had not been included.
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ARTICLE XII
STOCKHOLDER APPROVAL AND EFFECTIVE DATE
The Plan shall be submitted for approval by the holders of the
outstanding voting stock of the Company within twelve (12) months from the date
the Plan is adopted by the Board; provided, however, that if such vote was not
solicited substantially in accordance with the rules and regulations, if any, in
effect under ss.14(a) of the Exchange Act, at the time of such vote, the Company
will furnish in writing to the holders of record of the securities entitled to
vote for the Plan substantially the same information concerning the Plan which
would be required by the rules and regulations in effect under ss.14(a) of the
Exchange Act, as if proxies to be voted with respect to the approval or
disapproval of the Plan were then being solicited, on or prior to the date of
the first annual meeting of security holders held subsequent to the later of (i)
the first registration of an equity security under ss.12 of the Exchange Act; or
(ii) the acquisition of an equity security for which an exemption is claimed.
The Plan shall be deemed approved by the holders of the outstanding voting stock
of the Company by the affirmative vote of the holders of a majority of the
voting shares of the Company represented and voting at a duly held meeting at
which a quorum is present. Any Options granted under the Plan prior to obtaining
such stockholder approval shall be granted under the conditions that the Options
so granted (i) shall not be exercisable prior to such approval, and (ii) shall
become null and void if such stockholder approval is not obtained.
ARTICLE XIII
RELOAD OPTIONS
13.1 Reload Option. Whenever the Optionee holding any Option
outstanding under the Plan (including Reload Options granted under this Article
XIII) exercises the Option and makes payment of the Exercise Price pursuant to
Section 6.5(b) by tendering Common Stock previously held by the Optionee, then
the Company shall automatically grant a Reload Option for the number of shares
of Common Stock that is equal to the number of shares tendered by the Optionee
on payment of the Exercise Price of the Option being exercised.
13.2 Reload Option Exercise Price. The Reload Option Exercise Price per
share shall be an amount equal to the Fair Market Value per share of the
Company's Common Stock determined as of the date of receipt by the Company of
the notice by Optionee to exercise the option.
13.3 Term of Reload Option. The exercise period of the Reload
Option shall expire, and the Reload Option shall no longer be exercisable, on
the later of (i) expiration date of the original surrendered Option, or (ii) one
year from the date of grant.
13.4 Restriction on Exercise. Any Reload Option granted under this
Article XIII shall vest immediately, but shall not be exercisable until the end
of six months after the date of its issuance, except in the case of the death or
permanent disability of the Optionee, upon which event the Reload Option will
become immediately exercisable.
13.5 Other Terms of Reload Options. All other terms of the Reload
Options granted hereunder shall be identical to the terms and conditions of the
original Option, the exercise of which gives rise to the grant of the Reload
Option.
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