SCHEDULE 14C
(Rule 14c-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the Securities
Exchange Act of 1934
Check the appropriate box:
Preliminary information statement Confidential, for use of the Commission
[X] Definitive information statement
NON-INVASIVE MONITORING SYSTEMS, INC.
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(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction.
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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NON-INVASIVE MONITORING SYSTEMS, INC.
1840 West Avenue
Miami Beach, Florida 33139
APRIL 5, 2001
INFORMATION STATEMENT
This Information Statement is being furnished to stockholders of
Non-Invasive Monitoring Systems, Inc. a Florida corporation (the "Company"),
pursuant to the requirements of Regulation 14C under the Securities Exchange Act
1934, as amended (the "Exchange Act"), in connection with an action by written
consent, dated March 28, 2001, of the majority of the stockholders of the
Company in lieu of the Annual Meeting of Stockholders of the Company for the
year ended July 31, 2000 (the "Written Consent");
Management of the Company is utilizing the Written Consent in order to
reduce the expenses and demands on the Company's executives' time necessitated
by the holding of a meeting of stockholders, since the only business of such a
meeting would be:
(i) to approve the increase of the number of board of directors from
six members to eight members and elect Dr. Marvin A. Sackner, Gerard Kaiser,
M.D., Morton J. Robinson, M.D., Stanley C. Sackner, D.O., Taffy Gould, Robert
Moss and Jonathan Sackner-Bernstein to hold office until the Company's 2001
Annual Meeting of Stockholders or until their successors are duly elected and
qualified, and
(ii) to ratify the appointment of Gerson, Preston & Company, P.A. as
the Company's independent certified public accountants for the fiscal year
ending December 31, 2001; and
(ii) to approve the Company's 2000 Stock Option Plan (the "Stock Option
Plan").
The Company's major stockholder, Dr. Marvin A. Sackner, representing
approximately 53% of the issued and outstanding shares of the Company's $.01 par
value common stock (the "Common Stock") has voted for Management's nominees for
election as Directors, the ratification of the appointment of Gerson, Preston &
Company, P.A. as the Company's independent certified public accountants for the
fiscal year ending December 31, 2001 and the approval of the Stock Option Plan,
thereby ensuring the election of such nominees, ratification of the appointment
of the independent certified public accountants and approval of the Stock Option
Plan. See "Stockholder Approval Previously Obtained"; and "Security Ownership of
Certain Beneficial Owners and Management". The Company has received the executed
Written Consent from Dr. Marvin A. Sackner.
Stockholders of record at the close of business on April 5, 2001 are
being furnished copies of this Information Statement. This Information Statement
is being mailed to the stockholders of the Company, commencing on or about April
16, 2001.
Accordingly, all necessary corporate approvals in connection with the
matters referred to herein have been obtained, and this Information Statement is
furnished solely for the purpose of informing stockholders, in the manner
required under the Exchange Act, of these corporate actions.
WE ARE NOT ASKING YOU FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY.
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ACTIONS TAKEN
The Company, as authorized by the necessary approvals of the Board of
Directors of the Company and the majority of the stockholders of the Company,
have (i) approved the increase of the number of board of directors from six
members to eight members and elected Dr. Marvin Sackner, Gerard Kaiser, M.D.,
Morton J. Robinson, M.D., Stanley C. Sackner, D.O., Taffy Gould, Robert Moss and
Jonathan Sackner-Bernstein to hold office until the Company's 2001 Annual
Meeting of Stockholders or until their successors are duly elected and
qualified; (ii) ratified the appointment of Gerson, Preston & Company, P.A. as
the Company's independent certified public accountants for the fiscal year
ending July 31, 2001; and (iii) approved the Company's 2000 Stock Option Plan
(the "Stock Option Plan").
A copy of the Stock Option Plan is attached hereto as Exhibit A. The
Stock Option Plan was adopted to reserve two million (2,000,000) shares of
Common Stock available for issuance pursuant to the Stock Option Plan and to
provide for other forms of employee benefits. The shares of Common Stock will be
used to provide an additional incentive to attract, retain and motivate highly
qualified and competent persons who are key to the Company, and upon whose
efforts and judgment the success of the Company is largely dependent, including
key employees, consultants, independent contractors, advisory board members,
officers and directors, including outside directors.
The consent of the majority of stockholders with respect to the
election of directors, ratification of the Company's independent certified
public accountants for the fiscal year ending July 31, 2001 and the approval of
the Stock Option Plan, was effective on March 28, 2001. A complete summary of
each of these matters is set forth herein.
NO DISSENTERS' RIGHTS
Pursuant to the Florida Business Corporation Act, none of the corporate
actions described in this Information Statement will afford to stockholders the
opportunity to dissent from the actions described herein and to receive an
agreed or judicially appraised value for their shares.
STOCKHOLDER APPROVAL PREVIOUSLY OBTAINED
As of April 5, 2001, the Company had 21,514,726 issued and outstanding
shares of Common Stock, each of which is entitled to one vote on any matter
brought to a vote of the Company's stockholders. At a meeting held on December
15, 2000 and by written consent in lieu of a meeting, dated March 28, 2001, a
majority of stockholders (i) approved the increase of the number of board of
directors from six members to eight members and elected Dr. Marvin Sackner,
Gerard Kaiser, M.D., Morton J. Robinson, M.D., Stanley C. Sackner, D.O., Taffy
Gould, Robert Moss and Jonathan Sackner-Bernstein to hold office until the
Company's 2001 Annual Meeting of Stockholders or until their successors are duly
elected and qualified; and (ii) ratified the appointment of Gerson, Preston &
Company, P.A. as the Company's independent certified public accountants for the
fiscal year ending December 31, 2001 and (iii) approved the adoption and
implementation of the Stock Option Plan. Such action by meeting and written
consent (i) is sufficient to satisfy the applicable requirements of Florida law,
and (ii) is sufficient to satisfy the applicable requirements of Section 16 of
the Exchange Act, that the Stock Option Plan be approved by the stockholders.
Accordingly, the stockholders will not be asked to take action on the Stock
Option Plan at any future meeting.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT.
The following table sets forth certain information regarding NIMS'
Common Stock, Series C Convertible Preferred Stock and NIMS' voting securities
beneficially owned on April 5, 2001, by (i) each person who is known by NIMS to
own beneficially or exercise voting or dispositive control over 5% or more of
NIMS' Common Stock, (ii) each of NIMS' Directors and (iii) all executive
officers and Directors as a group:
No. of Shares
of Series C No. of Shares
No. of Shares Convertible of Voting
of Common Stock Percentage of Preferred Stock Securities Percentage of
Name and Address Beneficially Beneficial Beneficially Percentage Beneficially Beneficial
Identify of Group Owned (1) Ownership (2) Owned (1) of Class (3) Owned (1) Ownership (4)
Marvin A. 11,426,397(5) 53.1% 36,855.92 59.4% 11,463,252.92(5) 53.1%
Sackner, M.D.
1840 West Avenue,
Miami Beach, FL
33139
Ruth Sackner 11,426,397(5) 52.9% 36,855.92 59.4% 11,463,252.92(5) 53.1%
1840 West Avenue,
Miami Beach, FL
33139
Stanley C. 177,500(6) * 1,198.19 1.9% 178,698.19(6) *
Sackner, D.O.
1840 West Avenue,
Miami Beach, FL
33139
Morton J. 333,333 1.5% 1,073.19 1.7% 334,406.19 1.5%
Robinson, M.D.
1840 West Avenue,
Miami Beach, FL
33139
Jonathan 54,550(7) * -0- * 54,550 (7) *
Sackner-Bernstein
12 Southlawn
Avenue
Dobbs Ferry, NY
10522
Gerard Kaiser, 41,666 * 75.00 * 41,741 *
M.D.
1840 West Avenue,
Miami Beach, FL
33139
Taffy Gould -0- * -0- * -0- *
1840 West Avenue,
Miami Beach, FL
33139
Robert Moss -0- * -0- * -0- *
1840 West Avenue,
Miami Beach, FL
33139
All executive 12,033,446 55.9% 39,727.30 64% 12,073,173.3 55.9%
officers and
directors as a
group (8 persons)
- ---------------------------
* Less than 1%
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(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date hereof upon
exercise of option and warrants. Each beneficial owner's percentage
ownership is determined by assuming that option and warrants that are
held by such person (but not those held by any other person) and that
are exercisable within 60 days from the date hereof have been
exercised.
(2) Based on 21,514,726 shares of Common Stock issued and outstanding as of
April 5, 2001.
(3) Based on 62,048 Series C Convertible Preferred Stock issued and
outstanding, as of April 5, 2001.
(4) Based on 21,576,874 shares consisting of 21,514,726 shares of Common
Stock and 62,048 Series C Convertible Preferred Stock issued and
outstanding. Holders of Series C Preferred Stock are entitled to vote
together with the holders of shares of Common Stock on a
share-for-share basis as a single class, on all matters except as
otherwise required by law.
(5) Represents securities held by Dr. Marvin A. Sackner and Ruth Sackner,
his spouse.
(6) Includes shares of Common Stock held by a pension plan established in
connection with Dr. Stanley Sackner's medical practice and securities
held jointly by Dr. Sackner and his spouse.
(7) Includes securities held jointly by Mr. Sackner-Bernstein, his spouse
and immediate family.
ELECTION OF DIRECTORS BY WRITTEN CONSENT
The following table sets forth certain information with respect to
persons elected to the Board of Directors of the Company by the Written Consent:
Name Age Position
Marvin A. Sackner, M.D. 69 Chairman of the Board,
Chief Executive Officer and Director
Gerard Kaiser, M.D. 69 Director
Morton J., Robinson, M.D. 68 Director
Stanley C. Sackner, D.O. 64 Director
Taffy Gould 58 Director
Robert Moss 65 Director
Jonathan Sackner-Bernstein 40 Director
Andrew Smulian 55 Director
Set forth below are the biographies of each of the Company's Directors (all
of whom were elected by Written Consent:
MARVIN A. SACKNER, M.D., was elected to his positions as Chairman of
the Board, Chief Executive Officer and Director with the Company in November
1989. From 1974 until October 1991, Dr. Sackner was the Director of Medical
Services at Mount Sinai in Miami Beach, Florida. From 1973 to 1986, Dr. Sackner
was the President of the American Thoracic Society. Dr. Sackner was the Chairman
of the Pulmonary Disease Subspecialty Examining Board of the
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American Board of Internal Medicine from 1977 to 1980. He also currently serves
as Medical Director of LifeShirt.com, Inc.
GERARD KAISER, M.D. was elected a Director of the Company in November
1989. Since 1971, he has been at the University of Miami School of Medicine and
currently serves as Senior Associate Dean for Clinical Affairs. He also serves
as Senior Vice President for Medical Affairs at Jackson Memorial Hospital.
MORTON J. ROBINSON, M.D. was elected a Director of the Company in
November 1989. Dr. Robinson is Director and Chairman of the Department of
Pathology and Laboratory Medicine at Mount Sinai Medical Center, Miami Beach. He
is a Professor of Pathology at the University of Miami School of Medicine.
STANLEY C. SACKNER, D.O. was elected a Director of the Company in
November 1989. Dr. Sackner is on honorary staff of the Department of
Anesthesiology at Memorial Hospital in Union, New Jersey.
TAFFY GOULD was appointed as a Director of the Company in December,
2000. She was an executive with Housing Engineers of Florida, Inc., a real
estate management company. In December, 2000, she founded of
GlobalTechnologyAgents.com, LLC, which advises technology companies and
end-users in the business, academic, and medical spheres, worldwide.
ROBERT MOSS was appointed as a Director of the Company in December,
2000. He is the Chairman and Chief Executive Officer of Mahler Company, Inc., an
international consulting firm that conducts advanced management training
programs for executives worldwide.
JONATHAN SACKNER-BERNSTEIN was appointed as a Director of the Company
in December, 2000. He is a board-certified Internist and Cardiologist, and, the
Director of The Heart Failure Program and Associate Chief of the Division of
Cardiology at St. Luke's Roosevelt Hospital Medical Center in New York City. Dr.
Sackner-Bernstein is Assistant Professor of Clinical Medicine at Columbia
University, College of Physicians and Surgeons. He is the Founder and President
of Help-A-Friend Online, Inc., a company that provides tools to patients to
enable them to work with their doctors to get better health care.
ANDREW M. SMULIAN was appointed as a Director of the Company in
December, 2000. He is a Shareholder in Akerman, Senterfitt & Eidson, P.A. and
practices real estate and banking and finance law.
Directors of the Company hold their offices until the next annual
meeting of the Company's stockholders or until their successors have been duly
elected and qualified or until their earlier resignation, removal of office or
death. Other than an Audit and Legal Committee consisting of Gerard Kaiser and
Stanley Sackner and a Compensation and Stock Option Review Committee consisting
of Marvin A. Sackner and Morton J. Robinson, there are no committees of the
Board of Directors. The Board of Directors met one times in fiscal 2000. The
Audit and Legal Committee did not meet in fiscal 2000, and the Compensation and
Stock Option Review Committee met one time in fiscal 2000.
Officers of the Company serve at the pleasure of the Board of Directors
and until the first meeting of the Board of Directors following the next annual
meeting of the Company's stockholders and until their successors have been
chosen and qualified. Members of the Board of Directors receive options to
purchase 15,000 shares of the Company, pursuant to the Stock Option Plan, as
compensation for their participation on the Board of Directors.
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Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's Directors, executives officers and holders of more than
ten percent of the Company's Common Stock, to file reports of ownership and
changes in ownership with the Securities and Exchange Commission and NASDAQ.
Such persons are required to furnish the Company with copies of all Section
16(a) forms they file. Based solely on its review of the copies of such forms
received by it, or oral or written representations from certain reporting
persons that no Forms 5 were required for those persons, the Company believes
that, during fiscal 2000, all filing requirements applicable to its directors,
executive officers and greater than 10% beneficial owners were complied with.
The affirmative vote of a majority of the stockholders has approved the
increase of the number of members of the board of directors from six members to
eight members and elected Dr. Marvin A. Sackner, Gerard Kaiser, M.D., Morton J.
Robinson, M.D., Stanley C. Sackner, D.O., Taffy Gould, Robert Moss and Jonathan
Sackner-Bernstein to hold office until the Company's 2001 Annual Meeting of
Stockholders or until their successors are duly elected and qualified.
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Gerson, Preston & Company, P.A. as
the Company's independent certified public accountants for the fiscal year
ending July 31, 2001. Gerson, Preston & Company, P.A. was the independent public
auditor of the Company for the fiscal year ended July 31, 2000. The affirmative
vote of a majority of the stockholders has ratified the appointed votes of
Gerson, Preston & Company, P.A. as the Company's independent public auditor.
NON-INVASIVE MONITORING SYSTEMS, INC. 2000 STOCK OPTION PLAN
Under the 2000 Stock Option Plan (the "Stock Option Plan"), options to
purchase an aggregate of not more than 2,000,000 shares of common stock may be
granted from time to time to key employees (including officers), consultants and
directors. Options shall be designated as Incentive Stock Options ("ISOs") or
Nonqualified Stock Options ("NQSOs"). The Stock Option Plan is administered by a
committee consisting of Dr. Marvin A. Sackner and Morton J. Robinson, M.D. (the
"Committee"). The Committee is generally empowered to interpret the Stock Option
Plan; to prescribe rules and regulations relating thereto; to determine the
terms of the option agreements; to amend the option agreements with the consent
of the optionee; to determine the key employees and directors to whom options
are to be granted; and to determine the number of shares subject to each option
and the exercise price thereof. The per share exercise price of options granted
under the Stock Option Plan will be not less than 100% (110% for ISOs if the
optionee owns more than 10% of the common stock) of the fair market value per
share of common stock on the date the options are granted. The Stock Option also
provides for the issuance of stock appreciation rights at the discretion of the
Committee and provides for the issuance of restricted stock awards at the
discretion of the Committee.
Options will be exercisable for a term that will not be greater than
ten years from the date of grant (five years from the date of grant of an ISO if
the optionee owns more than 10% of the common stock). In the event of the
termination of the relationship between the option holder and the Company for
cause (as defined in the Stock Option Plan), all options granted to that option
holder terminate immediately. Options may be exercised during the option
holder's lifetime only by the option holder or his or her guardian or legal
representative.
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Options granted pursuant to the Stock Option Plan which are ISOs are
intended to enjoy the attendant tax benefits provided under Sections 421 and 422
of the Internal Revenue Code of 1986, as amended. Accordingly, the Stock Option
Plan provides that the aggregate fair market value (determined at the time an
ISO is granted) of the common stock subject to ISOs exercisable for the first
time by an option holder during any calendar year (under all plans of the
Company) may not exceed $100,000. The Board of Directors of the Company may
modify, suspend or terminate the Stock Option Plan; provided, however, that
certain material modifications affecting the Stock Option Plan must be approved
by the stockholders, and any change in the Stock Option Plan that may adversely
affect an option holder's rights under an option previously granted under the
Stock Option Plan requires the consent of the option holder.
The Board of Directors of the Company believes that the Stock Option
Plan reserves sufficient additional shares to provide for additional grants to
employees in the near future in order to attract and retain such key personnel.
The affirmative vote of a majority of the stockholders has approved the
Stock Option Plan.
MATERIAL INCORPORATED BY REFERENCE
The audited balance sheets of the Company as of July 31, 2000, 1999 and
1998 and the related statements of operations, shareholders' equity (deficit)
and cash flows for the three years ended July 31, 2000, are incorporated herein
by reference to the Company's Annual Report on Form 10-KSB for the fiscal year
ended July 31, 2000. The Company's unaudited consolidated balance sheets as of
October 31, 2000 and January 31, 2001, are incorporated herein by reference to
the Company's Quarterly Reports on Form 10-QSB for the quarter ended October 31,
2000 and January 31, 2001 respectively.
By Order of the Board of Directors
/s/ Dr. Marvin Sackner
------------------------------------------------
Dr. Marvin Sackner, Chairman of the Board
April 5, 2001
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Exhibit A
======================================================
NON-INVASIVE MONITORING SYSTEMS, INC.
2000 STOCK OPTION PLAN
======================================================
1. Purpose. The purpose of the Non-Invasive Monitoring Systems, Inc.,
2000 Stock Option Plan (the "Plan") is to advance the interests of Non-Invasive
Monitoring Systems, Inc., a Florida corporation (the "Company"), by providing an
additional incentive to attract, retain and motivate highly qualified and
competent persons who are key to the Company, and upon whose efforts and
judgment the success of the Company and its Subsidiaries is largely dependent,
including key employees, consultants, independent contractors, advisory board
members, Officers and Directors, by authorizing the grant of options to purchase
Common Stock of the Company to persons who are eligible to participate
hereunder, thereby encouraging stock ownership in the Company by such persons,
all upon and subject to the terms and conditions of this Plan.
2. Definitions. As used herein, the following terms shall have the
meanings indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cashless" or "Net Issue" exercise. In lieu of exercising
the Option, the Optionee may pay in whole or in part with Shares, the number of
which shall be determined by dividing (a) the aggregate Fair Value of such
Shares otherwise issuable upon exercise of the Option minus the aggregate
Exercise Price of such Option by (b) the Fair Value of one such Share, or the
Optionee may pay in whole or in part through a reduction in the number of Shares
received through the exercise of the Option equal to the quotient of the (a)
aggregate Fair Value of all the Shares issuable upon exercise of the Option
minus the aggregate Exercise Price of such Option (b) divided by the Fair Value
of one such share. If the exercise price is paid in whole or in part with
Shares, the value of the Shares surrendered shall be their Fair Market Value on
the date the Option is exercised.
(c) "Cause" shall mean any of the following:
(i) a determination by the Company that there has
been a willful, reckless or grossly negligent failure by the Optionee to perform
his or her duties as an employee of the Company;
(ii) a determination by the Company that there has
been a willful breach by the Optionee of any of the material terms or provisions
of any employment agreement between such Optionee and the Company;
(iii) any conduct by the Optionee that either results
in his or her conviction of a felony under the laws of the United States of
America or any state thereof, or of an equivalent crime under the laws of any
other jurisdiction;
(iv) a determination by the Company that the Optionee
has committed an act or acts involving fraud, embezzlement, misappropriation,
theft, breach of fiduciary duty or material dishonesty against the Company, its
properties or its personnel;
(v) any act by the Optionee that the Company
determines to be in willful or wanton disregard of the Company's best interests,
or which results, or is intended to result, directly or indirectly, in improper
gain or personal enrichment of the Optionee at the expense of the Company;
(vi) a determination by the Company that there has
been a willful, reckless or grossly negligent failure by the Optionee to comply
with any rules, regulations, policies or procedures of the Company, or that the
Optionee has engaged in any act, behavior or conduct demonstrating a deliberate
and material violation or disregard of standards of behavior that the Company
has a right to expect of its employees; or
(vii) if the Optionee, while employed by the Company
and for two years thereafter (or such shorter period as may be stated in any
employment, confidentiality or noncompete agreement with the Optionee), violates
a confidentiality and/or noncompete agreement with the Company, or fails to
safeguard, divulges, communicates, uses to the detriment of the Company or for
the benefit of any person or persons, or misuses in any way, any Confidential
Information; provided, however, that, if the Optionee has entered into a written
employment agreement with the Company which remains effective and which
expressly provides for a termination of such Optionee's employment for "cause,"
the term "Cause" for purposes of this Plan shall have the meaning as set forth
in the Optionee's employment agreement in lieu of the definition of "Cause" set
forth in this Section 2(b).
(d) "Change of Control" shall mean the acquisition by any
person or group (as that term is defined in the Securities Exchange Act, and the
rules promulgated pursuant to that act) in a single transaction or a series of
transactions of 50% or more in voting power of the outstanding stock of the
Company and a change of the composition of the Board of Directors so that,
within two years after the acquisition took place, a majority of the members of
the Board of Directors of the Company, or of any corporation with which the
Company may be consolidated or merged, are persons who were not directors or
officers of the Company or one of its Subsidiaries immediately prior to the
acquisition, or to the first of a series of transactions which resulted in the
acquisition of 50% or more in voting power of the outstanding stock of the
Company.
(e) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(f) "Committee" shall mean the stock option or compensation
committee appointed by the Board or, if not appointed, the Board.
(g) "Common Stock" shall mean the Company's common stock, par
value $0.01 per share.
(h) "Confidential Information" shall mean any and all
information pertaining to the Company's financial condition, clients, customers,
prospects, sources of prospects, customer lists, trademarks, trade names,
service marks, service names, "know-how," trade
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secrets, products, services, details of client or consulting contracts,
management agreements, pricing policies, operational methods, site selection,
results of operations, costs and methods of doing business, owners and ownership
structure, marketing practices, marketing plans or strategies, product
development techniques or plans, procurement and sales activities, promotion and
pricing techniques, credit and financial data concerning customers and business
acquisition plans, that is not generally available to the public.
(i) "Director" shall mean a member of the Board.
(j) "Employee" shall mean any person, including Officers,
Directors, consultants and independent contractors, who is either employed or
engaged by the Company or any parent or Subsidiary of the Company within the
meaning of Code Section 3401(c) or the regulations promulgated thereunder. For
purposes of any Non-Statutory Stock Option or Nonqualified Stock Option only,
any Officer or Director of the Company shall be considered an Employee even if
he or she is not an Employee within the meaning of the first sentence of this
section.
(k) "Fair Market Value" of a Share on any date of reference
shall be the Closing Price of a share of Common Stock on the business day
immediately preceding such date, unless the Committee in its sole discretion
shall determine otherwise in a fair and uniform manner. For this purpose, the
"Closing Price" of the Common Stock on any business day shall be (i) if the
Common Stock is listed or admitted for trading on any United States national
securities exchange, or if actual transactions are otherwise reported on a
consolidated transaction reporting system, the last reported sale price of the
Common Stock on such exchange or reporting system, as reported in any newspaper
of general circulation, (ii) if the Common Stock is quoted on the National
Association of Securities Dealers Automated Quotations System ("Nasdaq"), or any
similar system of automated dissemination of quotations of securities prices in
common use, the closing sales price or, if not available the mean between the
closing high bid and low asked quotations for such day of the Common Stock on
such system, or (iii) if neither clause (i) nor (ii) is applicable, the mean
between the high bid and low asked quotations for the Common Stock as reported
by the National Quotation Bureau, Incorporated if at least two securities
dealers have inserted both bid and asked quotations for the Common Stock on at
least five of the 10 preceding days. If the information set forth in clauses (i)
through (iii) above is unavailable or inapplicable to the Company (e.g., if the
Company's Common Stock is not then publicly traded or quoted), then the "Fair
Market Value" of a Share shall be the fair market value (i.e., the price at
which a willing seller would sell a Share to a willing buyer when neither is
acting under compulsion and when both have reasonable knowledge of all relevant
facts) of a share of the Common Stock on the business day immediately preceding
such date as the Committee in its sole and absolute discretion shall determine
in a fair and uniform manner.
(l) "Family Member" shall mean 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 Employee'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 person (or the Employee) control the management of
assets, and any other entity in which these persons (or the Employee) own more
than fifty percent of the voting interests.
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(m) "Incentive Stock Option" shall mean an incentive stock
option as defined in Section 422 of the Code.
(n) "Non-Employee Directors" shall have the meaning set forth
in Rule 16b-3(b)(3)(i) (17 C.F.R. ss.240.16(b)-3(b)(3)(i)) under the Securities
Exchange Act.
(o) "Non-Statutory Stock Option" or "Nonqualified Stock
Option" shall mean an Option which is not an Incentive Stock Option.
(p) "Officer" shall mean the Company's chairman, chief
executive officer, president, principal financial officer, principal accounting
officer (or, if there is no such accounting officer, the controller), any vice
president of the Company in charge of a principal business unit, division or
function (such as sales, administration or finance), any other officer who
performs a policy-making function, or any other person who performs similar
policy-making functions for the Company. Officers of Subsidiaries shall be
deemed Officers of the Company if they perform such policy-making functions for
the Company. As used in this paragraph, the phrase "policy-making function" does
not include policy-making functions that are not significant. Unless specified
otherwise in a resolution by the Board, an "executive officer" pursuant to Item
401(b) of Regulation S-K (17 C.F.R. ss.229.401(b)) shall be only such person
designated as an "Officer" pursuant to the foregoing provisions of this
paragraph.
(q) "Option" (when capitalized) shall mean any stock option
granted under this Plan.
(r) "Optionee" shall mean a person to whom an Option is
granted under this Plan or any person who succeeds to the rights of such person
under this Plan by reason of the death of such person.
(s) "Plan" shall mean this 2000 Stock Option Plan of the
Company, which Plan shall be effective upon approval by the Board, subject to
approval within 12 months of the date thereof by holders of a majority of the
Company's issued and outstanding Common Stock of the Company.
(t) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(u) "Securities Exchange Act" shall mean the Securities
Exchange Act of 1934, as amended.
(v) "Share" or "Shares" shall mean a share or shares, as the
case may be, of the Common Stock, as adjusted in accordance with Section 10 of
this Plan.
(w) "Subsidiary" shall mean any corporation (other than the
Company) in any unbroken chain of corporations beginning with the Company if, at
the time of the granting of the Option, each of the corporations other than the
last corporation in the unbroken chain owns stock possessing 50% or more of the
total combined voting power of all classes of stock in one of the other
corporations in such chain.
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3. Shares and Options. Subject to adjustment in accordance with Section
10 hereof, the Company may grant to Optionees from time to time Options to
purchase an aggregate of up to two million (2,000,000) Shares from Shares held
in the Company's treasury or from authorized and unissued Shares. If any Option
granted under this Plan shall terminate, expire, or be canceled, forfeited or
surrendered as to any Shares, the Shares relating to such lapsed Option shall be
available for issuance pursuant to new Options subsequently granted under this
Plan. Upon the grant of any Option hereunder, the authorized and unissued Shares
to which such Option relates shall be reserved for issuance to permit exercise
under this Plan. Subject to the provisions of Section 14 hereof, an Option
granted hereunder shall be either an Incentive Stock Option or a Non-Statutory
Stock Option as determined by the Committee at the time of grant of such Option
and shall clearly state whether it is an Incentive Stock Option or Non-Statutory
Stock Option. All Incentive Stock Options shall be granted within 10 years from
the effective date of this Plan.
4. Limitations. Options otherwise qualifying as Incentive Stock Options
hereunder will not be treated as Incentive Stock Options to the extent that the
aggregate Fair Market Value (determined at the time the Option is granted) of
the Shares, with respect to which Options meeting the requirements of Code
Section 422(b) are exercisable for the first time by any individual during any
calendar year (under all stock option or similar plans of the Company and any
Subsidiary), exceeds $100,000.
5. Conditions for Grant of Options.
(a) Each Option shall be evidenced by an option agreement that
may contain any term deemed necessary or desirable by the Committee, provided
such terms are not inconsistent with this Plan or any applicable law. Optionees
shall be those persons selected by the Committee from the class of all employees
of the Company or its Subsidiaries; Incentive Stock Options, however, may only
be granted to employees of the Company who satisfy the first sentence of Section
2(j) of this Plan. Any person who files with the Committee, in a form
satisfactory to the Committee, a written waiver of eligibility to receive any
Option under this Plan shall not be eligible to receive any Option under this
Plan for the duration of such waiver.
(b) In granting Options, the Committee shall take into
consideration the contribution the person has made, or is expected to make, to
the success of the Company or its Subsidiaries and such other factors as the
Committee shall determine. The Committee shall also have the authority to
consult with and receive recommendations from Officers and other personnel of
the Company and its Subsidiaries with regard to these matters. The Committee may
from time to time in granting Options under this Plan prescribe such terms and
conditions concerning such Options as it deems appropriate, including, without
limitation, (i) the exercise price or prices of the Option or any installments
thereof, (ii) prescribing the date or dates on which the Option becomes and/or
remains exercisable, (iii) providing that the Option vests or becomes
exercisable in installments over a period of time, and/or upon the attainment of
certain stated standards, specifications or goals, (iv) relating an Option to
the continued employment of the Optionee for a specified period of time, or (v)
conditions or termination events with respect to the exercisability of any
Option, provided that such terms and conditions are not more favorable to an
Optionee than those expressly permitted herein.
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(c) The Options granted to employees of the Company under this
Plan shall be in addition to regular salaries, pension, life insurance or other
benefits related to their employment with the Company or its Subsidiaries.
Neither this Plan nor any Option granted under this Plan shall confer upon any
person any right to employment or continuance of employment (or related salary
and benefits) by the Company or its Subsidiaries.
6. Exercise Price. The exercise price per Share of any Option shall be
any price determined by the Committee but shall not be less than the par value
per Share; provided, however, that in no event shall the exercise price per
Share of any Incentive Stock Option be less than the Fair Market Value of the
Shares underlying such Option on the date such Option is granted and, in the
case of an Incentive Stock Option granted to a 10% shareholder, the per Share
exercise price will not be less than 110% of the Fair Market Value in accordance
with Section 14 of this Plan. Re-granted Options, or Options which are canceled
and then re-granted covering such canceled Options, will, for purposes of this
Section 6, be deemed to have been granted on the date of the re-granting.
7. Exercise of Options.
An Option shall be deemed exercised when (i) the Company has
received written notice of such exercise in accordance with the terms of the
Option, (ii) full payment of the aggregate option price of the Shares as to
which the Option is exercised has been made, (iii) the Optionee has agreed to be
bound by the terms, provisions and conditions of any applicable shareholders'
agreement, and (iv) arrangements that are satisfactory to the Committee in its
sole discretion have been made for the Optionee's payment to the Company of the
amount that is necessary for the Company or the Subsidiary employing the
Optionee to withhold in accordance with applicable Federal or state tax
withholding requirements. Unless further limited by the Committee in any Option,
the exercise price of any Shares purchased pursuant to the exercise of such
Option shall be paid in cash, by certified or official bank check, by money
order, with Shares or by a combination of the above; provided, however, that the
Committee in its sole discretion may accept a personal check in full or partial
payment of any Shares. If the exercise price is paid in whole or in part with
Shares, the value of the Shares surrendered shall be their Fair Market Value on
the date the Option is exercised. The Company in its sole discretion may, on an
individual basis or pursuant to a general program established by the Committee
in connection with this Plan, lend money to an Optionee to exercise all or a
portion of the Option granted hereunder. If the exercise price is paid in whole
or part with the Optionee's promissory note, such note shall (i) provide for
full recourse to the maker, (ii) be collateralized by the pledge of the Shares
that the Optionee purchases upon exercise of such Option, (iii) bear interest at
a rate no less than the rate of interest payable by the Company to its principal
lender, and (iv) contain such other terms as the Committee in its sole
discretion shall require. Additionally, any Option may be exercised pursuant to
a Cashless or Net Issue exercise provision set forth in the Option agreement
evidencing such Option. No Optionee shall be deemed to be a holder of any shares
subject to an Option unless and until a stock certificate or certificates for
such shares are issued to the person(s) under the terms of this Plan. No
adjustments shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or property) or distributions or other rights for which the
record date is prior to the date such stock certificate is issued, except as
expressly provided in Section 10 hereof.
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(a) No Optionee shall be deemed to be a holder of any Shares
subject to an Option unless and until a stock certificate or certificates for
such Shares are issued to such person(s) under the terms of this Plan. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property) or distributions or other rights for which
the record date is prior to the date such stock certificate is issued, except as
expressly provided in Section 10 hereof.
8. Exercisability of Options. Any Option shall become exercisable in
such amounts, at such intervals, upon such events or occurrences and upon such
other terms and conditions as shall be provided in an individual Option
agreement evidencing such Option, except as otherwise provided in Section 5(b)
or this Section 8.
(a) The expiration date(s) of an Option shall be determined by
the Committee at the time of grant, but in no event shall an Option be
exercisable after the expiration of 10 years from the date of grant of the
Option.
(b) Unless otherwise expressly provided in any Option as
approved by the Committee, notwithstanding the exercise schedule set forth in
any Option, each outstanding Option, may, in the sole discretion of the
Committee, become fully exercisable upon the date of the occurrence of any
Change of Control.
(c) The Committee may in its sole discretion accelerate the
date on which any Option may be exercised and may accelerate the vesting of any
Shares subject to any Option or previously acquired by the exercise of any
Option.
9. Termination of Option Period.
(a) Unless otherwise expressly provided in any Option, the
unexercised portion of any Option shall automatically and without notice
immediately terminate and become forfeited, null and void at the time of the
earliest to occur of the following:
(i) three months after the date on which the
Optionee's employment is terminated for any reason other than by reason of (A)
Cause, (B) the termination of the Optionee's employment with the Company by such
Optionee following less than 30 days' prior written notice to the Company of
such termination (an "Improper Termination"), (C) a mental or physical
disability (within the meaning of Section 22(e) of the Code) as determined by a
medical doctor satisfactory to the Committee, or (D) death;
(ii) immediately upon (A) the termination by the
Company of the Optionee's employment for Cause, or (B) an Improper Termination;
(iii) one year after the date on which the Optionee's
employment is terminated by reason of a mental or physical disability (within
the meaning of Code Section 22(e)) as determined by a medical doctor
satisfactory to the Committee; or
(iv) the later of (A) 12 months after the date of
termination of the Optionee's employment by reason of death of the employee, or
(B) three months after the date
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on which the Optionee shall die if such death shall occur during the one-year
period specified in Subsection 9(a)(iii) hereof.
(b) The Committee in its sole discretion may, by giving
written notice ("cancellation notice"), cancel effective upon the date of the
consummation of any corporate transaction described in Subsection 10(d) hereof,
any Option that remains unexercised on such date. Such cancellation notice shall
be given a reasonable period of time prior to the proposed date of such
cancellation and may be given either before or after approval of such corporate
transaction.
(c) Upon Optionee's termination of employment as described in
this Section 9, or otherwise, any Option (or portion thereof) not previously
vested or not yet exercisable pursuant to Section 8 of this Plan or the vesting
schedule set forth in the Option agreement evidencing such Option shall be
immediately canceled.
10. Adjustment of Shares.
(a) If at any time while this Plan is in effect or unexercised
Options are outstanding, there shall be any increase or decrease in the number
of issued and outstanding Shares through the declaration of a stock dividend or
through any recapitalization resulting in a stock split, combination or exchange
of Shares (other than any such exchange or issuance of Shares through which
Shares are issued to effect an acquisition of another business or entity or the
Company's purchase of Shares pursuant to a plan of repurchase approved by the
Board or to exercise a "call" purchase option), then and in such event:
(i) appropriate adjustment shall be made in the
maximum number of Shares available for grant under this Plan, so that the same
percentage of the Company's issued and outstanding Shares shall continue to be
subject to being so optioned;
(ii) appropriate adjustment shall be made in the
number of Shares and the exercise price per Share thereof then subject to any
outstanding Option, so that the same percentage of the Company's issued and
outstanding Shares shall remain subject to purchase at the same aggregate
exercise price; and
(iii) such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive.
(b) Subject to the specific terms of any Option, the Committee
may change the terms of Options outstanding under this Plan, with respect to the
option price or the number of Shares subject to the Options, or both, when, in
the Committee's sole discretion, such adjustments become appropriate by reason
of a corporate transaction described in Subsection 10(d) hereof, or otherwise.
(c) Except as otherwise expressly provided herein, the
issuance by the Company of shares of its capital stock of any class, or
securities convertible into or exchangeable for shares of its capital stock of
any class, either in connection with a direct or underwritten sale or upon the
exercise of rights or warrants to subscribe therefor or purchase such Shares, or
upon conversion of shares or obligations of the Company convertible into such
shares or other
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securities, shall not affect, and no adjustment by reason thereof shall be made
with respect to, the number of or exercise price of Shares then subject to
outstanding Options granted under this Plan.
(d) Without limiting the generality of the foregoing, the
existence of outstanding Options granted under this Plan shall not affect in any
manner the right or power of the Company to make, authorize or consummate (i)
any or all adjustments, reclassifications, recapitalizations, reorganizations or
other changes in the Company's capital structure or its business; (ii) any
merger or consolidation of the Company or to which the Company is a party; (iii)
any issuance by the Company of debt securities, or preferred or preference stock
that would rank senior to or above the Shares subject to outstanding Options;
(iv) any purchase or issuance by the Company of Shares or other classes of
Common Stock or common equity securities; (v) the dissolution or liquidation of
the Company; (vi) any sale, transfer, encumbrance, pledge or assignment of all
or any part of the assets or business of the Company; or (vii) any other
corporate act or proceeding, whether of a similar character or otherwise.
(e) The Optionee shall receive written notice within a
reasonable time prior to the consummation of such action advising the Optionee
of any of the foregoing. The Committee may, in the exercise of its sole
discretion, in such instances declare that any Option shall terminate as of a
date fixed by the Board and give each Optionee the right to exercise his or her
Option.
11. Transferability of Options. No Option granted hereunder shall be
sold, pledged, assigned, hypothecated, disposed or otherwise transferred by the
Optionee other than by will or the laws of descent and distribution, unless
otherwise authorized by the Board, and no Option shall be exercisable during the
Optionee's lifetime by any person other than the Optionee.
12. Issuance of Shares. As a condition of any sale or issuance of
Shares upon exercise of any Option, the Committee may require such agreements or
undertakings, if any, as the Committee may deem necessary or advisable to assure
compliance with any such law or regulation including, but not limited to, the
following:
(i) a representation and warranty by the Optionee to
the Company, at the time any Option is exercised, that he is acquiring the
Shares to be issued to him for investment and not with a view to, or for sale in
connection with, the distribution of any such Shares; and
(ii) an agreement and undertaking to comply with all
of the terms, restrictions and provisions set forth in any then applicable
shareholders' or other agreement relating to the Shares, including, without
limitation, any restrictions on sale or transferability, any rights of first
refusal and any option of the Company to "call" or purchase such Shares under
then applicable agreements; and
(iii) any restrictive legend or legends, to be
embossed or imprinted on Share certificates, that are, in the discretion of the
Committee, necessary or appropriate to comply with the provisions of any
securities law or other restriction applicable to the issuance of the Shares.
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13. Administration of this Plan.
(a) This Plan shall be administered by a Committee which shall
consist of not less than two Directors. In the event the Common Stock is listed
or admitted for trading on any United States national securities exchange or as
otherwise required by or advisable under any applicable laws, rules or
regulations, the Plan shall be administered by a Committee consisting of not
less than two Non-Employee Directors. The Committee shall have all of the powers
of the Board with respect to this Plan. Any member of the Committee may be
removed at any time, with or without cause, by resolution of the Board and any
vacancy occurring in the membership of the Committee may be filled by
appointment by the Board.
(b) Subject to the provisions of this Plan, the Committee
shall have the authority, in its sole discretion, to: (i) grant Options, (ii)
determine the exercise price per Share at which Options may be exercised, (iii)
determine the Optionees to whom, and time or times at which, Options shall be
granted, (iv) determine the number of Shares to be represented by each Option,
(v) determine the terms, conditions and provisions of each Option granted (which
need not be identical) and, with the consent of the holder thereof, modify or
amend each Option, (vi) defer (with the consent of the Optionee) or accelerate
the exercise date of any Option, and (vii) make all other determinations deemed
necessary or advisable for the administration of this Plan, including repricing,
canceling and regranting Options.
(c) The Committee, from time to time, may adopt rules and
regulations for carrying out the purposes of this Plan. The Committee's
determinations and its interpretation and construction of any provision of this
Plan shall be final, conclusive and binding upon all Optionees and any holders
of any Options granted under this Plan.
(d) Any and all decisions or determinations of the Committee
shall be made either (i) by a majority vote of the members of the Committee at a
meeting of the Committee or (ii) without a meeting by the unanimous written
approval of the members of the Committee.
(e) No member of the Committee, or any Officer or Director of
the Company or its Subsidiaries, shall be personally liable for any act or
omission made in good faith in connection with this Plan.
14. Incentive Options for 10% Shareholders. Notwithstanding any other
provisions of this Plan to the contrary, an Incentive Stock Option shall not be
granted to any person owning directly or indirectly (through attribution under
Section 424(d) of the Code) at the date of grant, stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company (or of
its Subsidiary) at the date of grant unless the exercise price of such Option is
at least 110% of the Fair Market Value of the Shares subject to such Option on
the date the Option is granted, and such Option by its terms is not exercisable
after the expiration of five years from the date such Option is granted.
15. Stock Appreciation Rights. The Committee may grant stock
appreciation rights to employees of the Company, either or tandem with Options
that have been or are granted under the Plan or with respect to a number of
Shares on which an Option is not granted. A stock appreciation right shall
entitle the holder to receive, with respect to each Share as to which the
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right is exercised, payment in an amount equal to the excess of the Share's Fair
Market Value on the date the right is exercised over its Fair Market Value on
the date the right was granted. Such payment may be made in cash or in Shares
valued at the Fair Market Value as of the date of surrender, or partly in cash
and partly in Shares, as determined by the Committee in its sole discretion. The
Committee may establish a maximum appreciation value payable for stock
appreciation rights.
16. Restricted Stock Awards. The Committee may grant restricted stock
awards under the Plan in Shares or denominated in units of Shares. The
Committee, in its sole discretion, may make such awards subject to conditions
and restrictions, as set forth in the instrument evidencing the award, which may
be based on continuous service with the Company or the attainment of certain
performance goals related to profits, profit growth, cash-flow or shareholder
returns, where such goals may be stated in absolute terms or relative to
comparison companies or indices to be achieved during a period of time.
17. Interpretation.
(a) This Plan shall be administered and interpreted so that
all Incentive Stock Options granted under this Plan will qualify as Incentive
Stock Options under Section 422 of the Code. If any provision of this Plan
should be held invalid for the granting of Incentive Stock Options or illegal
for any reason, such determination shall not affect the remaining provisions
hereof, and this Plan shall be construed and enforced as if such provision had
never been included in this Plan.
(b) This Plan shall be governed by the laws of the State of
Florida.
(c) Headings contained in this Plan are for convenience only
and shall in no manner be construed as part of this Plan or affect the meaning
or interpretation of any part of this Plan.
(d) Any reference to the masculine, feminine, or neuter gender
shall be a reference to such other gender as is appropriate.
(e) Time shall be of the essence with respect to all time
periods specified for the giving of notices to the Company hereunder, as well as
all time periods for the expiration and termination of Options in accordance
with Section 9 hereof (or as otherwise set forth in an option agreement).
(f) From and after such time as the Company registers a class
of equity securities under Section 12 of the Securities Exchange Act, it is
intended that this Plan shall be administered in accordance with the
disinterested administration requirements of Rule 16b-3 promulgated by the
Securities and Exchange Commission ("Rule 16b-3"), or any successor rule
thereto. To the extent any provision of this Plan or action by the Committee
fails to so comply, it shall be deemed null and void, to the extent permitted by
law and deemed advisable by the Committee. Notwithstanding the above, it shall
be the responsibility of each Optionee, not of the Company or the Committee, to
comply with the requirements of Section 16 of the Securities Exchange Act; and
neither the Company nor the Committee shall be liable if this Plan or any
transaction under this Plan fails to comply with the applicable conditions of
Rule 16b-3 or any
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successor rule thereto, or if any such person incurs any liability under Section
16 of the Securities Exchange Act.
18. Market Standoff or Lock-Up Agreements. Each Optionee, if so
requested by the Company or any representative of the underwriters in connection
with any registration of the offering of any securities of the Company under the
Securities Act, shall not sell or otherwise transfer any shares of Common Stock
acquired upon exercise of Options during the period as may be agreed to by the
Company and such underwriters (the "Lock-Up Period") following the effective
date of such registration. The Company may impose stop-transfer instructions
with respect to securities subject to the foregoing restriction until the end of
such Lock-Up Period.
19. Amendment and Discontinuation of this Plan. Either the Board or the
Committee may from time to time amend this Plan or any Option without the
consent or approval of the shareholders of the Company; provided, however, that,
except to the extent provided in Section 9, no amendment or suspension of this
Plan or any Option issued hereunder shall substantially impair any Option
previously granted to any Optionee without the consent of such Optionee
20. Termination Date. This Plan shall remain in effect until terminated
by the Board, but not later than 10 years after the date of grant of any Option
hereunder, whichever first occurs.
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