Exhibit 4.1
BEVSYSTEMS INTERNATIONAL, INC. 2004 INCENTIVE STOCK PLAN
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THIS BEVSYSTEMS INTERNATIONAL, INC. 2004 INCENTIVE STOCK PLAN (the
"Plan") is designed to retain directors, executives and selected employees and
consultants and reward them for making major contributions to the success of the
Company. These objectives are accomplished by making long-term incentive awards
under the Plan thereby providing Participants with a proprietary interest in the
growth and performance of the Company.
1. Definitions.
(a) "Board" - The Board of Directors of the Company.
(b) "Code" - The Internal Revenue Code of 1986, as amended from time to
time.
(c) "Committee" - The Compensation Committee of the Company's Board, or
such other committee of the Board that is designated by the Board to
administer the Plan, composed of not less than two members of the
Board all of whom are disinterested persons, as contemplated by Rule
16b-3 ("Rule 16b-3") promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act").
(d) "Company" - BEVSYSTEMS INTERNATIONAL, INC. and its subsidiaries
including subsidiaries of subsidiaries.
(e) "Exchange Act" - The Securities Exchange Act of 1934, as amended from
time to time.
(f) "Fair Market Value" - The fair market value of the Company's issued
and outstanding Stock as determined in good faith by the Board or
Committee.
(g) "Florida Securities Rules" - Chapter 517.061 (15) of Title XXXIII of
the Florida Statues.
(h) "Grant" - The grant of any form of stock option, stock award, or stock
purchase offer, whether granted singly, in combination or in tandem,
to a Participant pursuant to such terms, conditions and limitations as
the Committee may establish in order to fulfill the objectives of the
Plan.
(i) "Grant Agreement" - An agreement between the Company and a Participant
that sets forth the terms, conditions and limitations applicable to a
Grant.
(j) "Option" - Either an Incentive Stock Option, in accordance with
Section 422 of Code, or a Nonstatutory Option, to purchase the
Company's Stock that may be awarded to a Participant under the Plan. A
Participant who receives an award of an Option shall be referred to as
an "Optionee."
(k) "Participant" - A director, officer, employee or consultant of the
Company to whom an Award has been made under the Plan.
(l) "Restricted Stock Purchase Offer" - A Grant of the right to purchase a
specified number of shares of Stock pursuant to a written agreement
issued under the Plan.
(m) "Securities Act" - The Securities Act of 1933, as amended from time to
time.
(n) "Stock" - Authorized and issued or unissued shares of common stock of
the Company.
(o) "Stock Award" - A Grant made under the Plan in stock or denominated in
units of stock for which the Participant is not obligated to pay
additional consideration.
2. Administration. The Plan shall be administered by the Board, provided
however, that the Board may delegate such administration to the Committee.
Subject to the provisions of the Plan, the Board and/or the Committee shall
have authority to (a) grant, in its discretion, Incentive Stock Options in
accordance with Section 422 of the Code, or Nonstatutory Options, Stock
Awards or Restricted Stock Purchase Offers; (b) determine in good faith the
fair market value of the Stock covered by any Grant; (c) determine which
eligible persons shall receive Grants and the number of shares,
restrictions, terms and conditions to be included in such Grants; (d)
construe and interpret the Plan; (e) promulgate, amend and rescind rules
and regulations relating to its administration, and correct defects,
omissions and inconsistencies in the Plan or any Grant; (f) consistent with
the Plan and with the consent of the Participant, as appropriate, amend any
outstanding Grant or amend the exercise date or dates thereof; (g)
determine the duration and purpose of leaves of absence which may be
granted to Participants without constituting termination of their
employment for the purpose of the Plan or any Grant; and (h) make all other
determinations necessary or advisable for the Plan's administration. The
interpretation and construction by the Board of any provisions of the Plan
or selection of Participants shall be conclusive and final. No member of
the Board or the Committee shall be liable for any action or determination
made in good faith with respect to the Plan or any Grant made thereunder.
3. Eligibility.
(a) General: The persons who shall be eligible to receive Grants shall be
directors, officers, employees or consultants to the Company. The term
consultant shall mean any person, other than an employee, who is
engaged by the Company to render services and is compensated for such
services. An Optionee may hold more than one Option. Any issuance of a
Grant to an officer or director of the Company subsequent to the first
registration of any of the securities of the Company under the
Exchange Act shall comply with the requirements of Rule 16b-3.
(b) Incentive Stock Options: Incentive Stock Options may only be issued to
employees of the Company. Incentive Stock Options may be granted to
officers or directors, provided they are also employees of the
Company. Payment of a director's fee shall not be sufficient to
constitute employment by the Company.
The Company shall not grant an Incentive Stock Option under the Plan
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to any employee if such Grant would result in such employee holding the
right to exercise for the first time in any one calendar year, under all
Incentive Stock Options granted under the Plan or any other plan maintained
by the Company, with respect to shares of Stock having an aggregate fair
market value, determined as of the date of the Option is granted, in excess
of $100,000. Should it be determined that an Incentive Stock Option granted
under the Plan exceeds such maximum for any reason other than a failure in
good faith to value the Stock subject to such option, the excess portion of
such option shall be considered a Nonstatutory Option. To the extent the
employee holds two (2) or more such Options which become exercisable for
the first time in the same calendar year, the foregoing limitation on the
exercisability of such Option as Incentive Stock Options under the Federal
tax laws shall be applied on the basis of the order in which such Options
are granted. If, for any reason, an entire Option does not qualify as an
Incentive Stock Option by reason of exceeding such maximum, such Option
shall be considered a Nonstatutory Option.
(c) Nonstatutory Option: The provisions of the foregoing Section 3(b)
shall not apply to any Option designated as a "Nonstatutory Option" or
which sets forth the intention of the parties that the Option be a
Nonstatutory Option.
(d) Stock Awards and Restricted Stock Purchase Offers: The provisions
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of this Section 3 shall not apply to any Stock Award orRestricted Stock
Purchase Offer under the Plan.
4. Stock.
(a) Authorized Stock: Stock subject to Grants may be either unissued or
reacquired Stock.
(b) Number of Shares: Subject to adjustment as provided in Section 5(i) of
the Plan, the total number of shares of Stock which may be purchased
or granted directly by Options, Stock Awards or Restricted Stock
Purchase Offers, or purchased indirectly through exercise of Options
granted under the Plan shall not exceed Thirty Five Million
(35,000,000). If any Grant shall for any reason terminate or expire,
any shares allocated thereto but remaining unpurchased upon such
expiration or termination shall again be available for Grants with
respect thereto under the Plan as though no Grant had previously
occurred with respect to such shares. Any shares of Stock issued
pursuant to a Grant and repurchased pursuant to the terms thereof
shall be available for future Grants as though not previously covered
by a Grant.
(c) Reservation of Shares: The Company shall reserve and keep available at
all times during the term of the Plan such number of shares as shall
be sufficient to satisfy the requirements of the Plan. If, after
reasonable efforts, which efforts shall not include the registration
of the Plan or Grants under the Securities Act, the Company is unable
to obtain authority from any applicable regulatory body, which
authorization is deemed necessary by legal counsel for the Company for
the lawful issuance of shares hereunder, the Company shall be relieved
of any liability with respect to its failure to issue and sell the
shares for which such requisite authority was so deemed necessary
unless and until such authority is obtained.
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(d) Application of Funds: The proceeds received by the Company from the
sale of Stock pursuant to the exercise of Options or rights under
Stock Purchase Agreements will be used for general corporate purposes.
(e) No Obligation to Exercise: The issuance of a Grant shall impose no
obligation upon the Participant to exercise any rights under such
Grant.
5. Terms and Conditions of Options. Options granted hereunder shall be
evidenced by agreements between the Company and the respective Optionees,
in such form and substance as the Board or Committee shall from time to
time approve. The form of Incentive Stock Option Agreement attached hereto
as Exhibit A and the three forms of a Nonstatutory Stock Option Agreement
for employees, for directors and for consultants, attached hereto as
Exhibit B-1, Exhibit B-2 and Exhibit B-3, respectively, shall be deemed to
be approved by the Board. Option agreements need not be identical, and in
each case may include such provisions as the Board or Committee may
determine, but all such agreements shall be subject to and limited by the
following terms and conditions:
(a) Number of Shares: Each Option shall state the number of shares to
which it pertains.
(b) Exercise Price: Each Option shall state the exercise price, which
shall be determined as follows:
(i) Any Incentive Stock Option granted to a person who at the time
the Option is granted owns (or is deemed to own pursuant to
Section 424(d) of the Code) stock possessing more than ten
percent (10%) of the total combined voting power or value of all
classes of stock of the Company ("Ten Percent Holder") shall have
an exercise price of no less than 110% of the Fair Market Value
of the Stock as of the date of grant; and
(ii) Incentive Stock Options granted to a person who at the time the
Option is granted is not a Ten Percent Holder shall have an
exercise price of no less than 100% of the Fair Market Value of
the Stock as of the date of grant.
For the purposes of this Section 5(b), the Fair Market Value
shall be as determined by the Board in good faith, which determination
shall be conclusive and binding; provided however, that if there is a
public market for such Stock, the Fair Market Value per share shall be
the average of the bid and asked prices (or the closing price if such
stock is listed on the NASDAQ National Market System or Small Cap
Issue Market) on the date of grant of the Option, or if listed on a
stock exchange, the closing price on such exchange on such date of
grant.
(c) Medium and Time of Payment: The exercise price shall become
immediately due upon exercise of the Option and shall be paid in cash
or check made payable to the Company. Should the Company's outstanding
Stock be registered under Section 12(g) of the Exchange Act at the
time the Option is exercised, then the exercise price may also be paid
as follows:
(i) in shares of Stock held by the Optionee for the requisite period
necessary to avoid a charge to the Company's earnings for
financial reporting purposes and valued at Fair Market Value on
the exercise date, or
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(ii) through a special sale and remittance procedure pursuant to which
the Optionee shall concurrently provide irrevocable written
instructions (a) to a Company designated brokerage firm to effect
the immediate sale of the purchased shares and remit to the
Company, out of the sale proceeds available on the settlement
date, sufficient funds to cover the aggregate exercise price
payable for the purchased shares plus all applicable Federal,
state and local income and employment taxes required to be
withheld by the Company by reason of such purchase and (b) to the
Company to deliver the certificates for the purchased shares
directly to such brokerage firm in order to complete the sale
transaction.
At the discretion of the Board, exercisable either at the time of
Option grant or of Option exercise, the exercise price may also be
paid (i) by Optionee's delivery of a promissory note in form and
substance satisfactory to the Company and permissible under the
Securities Rules of the State of Florida and bearing interest at a
rate determined by the Board in its sole discretion, but in no event
less than the minimum rate of interest required to avoid the
imputation of compensation income to the Optionee under the Federal
tax laws, or (ii) in such other form of consideration permitted by the
Florida corporations law as may be acceptable to the Board.
(d) Term and Exercise of Options: Any Option granted to an employee of the
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Company shall become exercisable over a period of no longer than five
(5) years, and no less than twenty percent (20%) of the shares covered
thereby shall become exercisable annually. No Option shall be
exercisable, in whole or in part, prior to one (1) year from the date
it is granted unless the Board shall specifically determine otherwise,
as provided herein. In no event shall any Option be exercisable after
the expiration of ten (10) years from the date it is granted, and no
Incentive Stock Option granted to a Ten Percent Holder shall, by its
terms, be exercisable after the expiration of five (5) years from the
date of the Option. Unless otherwise specified by the Board or the
Committee in the resolution authorizing such Option, the date of grant
of an Option shall be deemed to be the date upon which the Board or
the Committee authorizes the granting of such Option.
Each Option shall be exercisable to the nearest whole share, in
installments or otherwise, as the respective Option agreements may
provide. During the lifetime of an Optionee, the Option shall be
exercisable only by the Optionee and shall not be assignable or
transferable by the Optionee, and no other person shall acquire any
rights therein. To the extent not exercised, installments (if more
than one) shall accumulate, but shall be exercisable, in whole or in
part, only during the period for exercise as stated in the Option
agreement, whether or not other installments are then exercisable.
(e) Termination of Status as Employee, Consultant or Director: If
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Optionee's status as an employee shall terminate for any reason other
than Optionee's disability or death, then Optionee (or if the Optionee
shall die after such termination, but prior to exercise, Optionee's
personal representative or the person entitled to succeed to the
Option) shall have the right to exercise the portions of any of
Optionee's Incentive Stock Options which were exercisable as of the
date of such termination, in whole or in part, not less than 30 days
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nor more than three (3) months after such termination (or, in the
event of "termination for good cause" as that term is defined in
Florida case law related thereto, or by the terms of the Plan or the
Option Agreement or an employment agreement, the Option shall
automatically terminate as of the termination of employment as to all
shares covered by the Option).
With respect to Nonstatutory Options granted to employees,
directors or consultants, the Board may specify such period for
exercise, not less than 30 days (except that in the case of
"termination for cause" or removal of a director, the Option shall
automatically terminate as of the termination of employment or
services as to shares covered by the Option, following termination of
employment or services as the Board deems reasonable and appropriate.
The Option may be exercised only with respect to installments that the
Optionee could have exercised at the date of termination of employment
or services. Nothing contained herein or in any Option granted
pursuant hereto shall be construed to affect or restrict in any way
the right of the Company to terminate the employment or services of an
Optionee with or without cause.
(f) Disability of Optionee: If an Optionee is disabled (within the meaning
of Section 22(e)(3) of the Code) at the time of termination, the three
(3) month period set forth in Section 5(e) shall be a period, as
determined by the Board and set forth in the Option, of not less than
six months nor more than one year after such termination.
(g) Death of Optionee: If an Optionee dies while employed by,
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Director of the Company, the portion of such Optionee's Option which
was exercisable at the date of death may be exercised, in whole or in
part, by the estate of the decedent or by a person succeeding to the
right to exercise such Option at any time within (i) a period, as
determined by the Board and set forth in the Option, of not less than
six (6) months nor more than one (1) year after Optionee's death,
which period shall not be more, in the case of a Nonstatutory Option,
than the period for exercise following termination of employment or
services, or (ii) during the remaining term of the Option, whichever
is the lesser. The Option may be so exercised only with respect to
installments exercisable at the time of Optionee's death and not
previously exercised by the Optionee.
(h) Nontransferability of Option: No Option shall be transferable by the
Optionee, except by will or by the laws of descent and distribution.
(i) Recapitalization: Subject to any required action of shareholders, the
number of shares of Stock covered by each outstanding Option, and the
exercise price per share thereof set forth in each such Option, shall
be proportionately adjusted for any increase or decrease in the number
of issued shares of Stock of the Company resulting from a stock split,
stock dividend, combination, subdivision or reclassification of
shares, or the payment of a stock dividend, or any other increase or
decrease in the number of such shares affected without receipt of
consideration by the Company; provided, however, the conversion of any
convertible securities of the Company shall not be deemed to have been
"effected without receipt of consideration" by the Company.
In the event of a proposed dissolution or liquidation of the
Company, a merger or consolidation in which the Company is not the
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surviving entity, or a sale of all or substantially all of the assets
or capital stock of the Company (collectively, a "Reorganization"),
unless otherwise provided by the Board, this Option shall terminate
immediately prior to such date as is determined by the Board, which
date shall be no later than the consummation of such Reorganization.
In such event, if the entity which shall be the surviving entity does
not tender to Optionee an offer, for which it has no obligation to do
so, to substitute for any unexercised Option a stock option or capital
stock of such surviving of such surviving entity, as applicable, which
on an equitable basis shall provide the Optionee with substantially
the same economic benefit as such unexercised Option, then the Board
may grant to such Optionee, in its sole and absolute discretion and
without obligation, the right for a period commencing thirty (30) days
prior to and ending immediately prior to the date determined by the
Board pursuant hereto for termination of the Option or during the
remaining term of the Option, whichever is the lesser, to exercise any
unexpired Option or Options without regard to the installment
provisions of Paragraph 6(d) of the Plan; provided, that any such
right granted shall be granted to all Optionees not receiving an offer
to receive substitute options on a consistent basis, and provided
further, that any such exercise shall be subject to the consummation
of such Reorganization.
Subject to any required action of shareholders, if the Company
shall be the surviving entity in any merger or consolidation, each
outstanding Option thereafter shall pertain to and apply to the
securities to which a holder of shares of Stock equal to the shares
subject to the Option would have been entitled by reason of such
merger or consolidation.
In the event of a change in the Stock of the Company as presently
constituted, which is limited to a change of all of its authorized
shares without par value into the same number of shares with a par
value, the shares resulting from any such change shall be deemed to be
the Stock within the meaning of the Plan.
To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the
Board, whose determination in that respect shall be final, binding and
conclusive. Except as expressly provided in this Section 5(i), the
Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of
shares of stock of any class, and the number or price of shares of
Stock subject to any Option shall not be affected by, and no
adjustment shall be made by reason of, any dissolution, liquidation,
merger, consolidation or sale of assets or capital stock, or any issue
by the Company of shares of stock of any class or securities
convertible into shares of stock of any class.
The Grant of an Option pursuant to the Plan shall not affect in
any way the right or power of the Company to make any adjustments,
reclassifications, reorganizations or changes in its capital or
business structure or to merge, consolidate, dissolve, or liquidate or
to sell or transfer all or any part of its business or assets.
(j) Rights as a Shareholder: An Optionee shall have no rights as a
shareholder with respect to any shares covered by an Option until the
effective date of the issuance of the shares following exercise of
such Option by Optionee. No adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other
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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 5(i) hereof.
(k) Modification, Acceleration, Extension, and Renewal of Options: Subject
to the terms and conditions and within the limitations of the Plan,
the Board may modify an Option, or, once an Option is exercisable,
accelerate the rate at which it may be exercised, and may extend or
renew outstanding Options granted under the Plan or accept the
surrender of outstanding Options (to the extent not theretofore
exercised) and authorize the granting of new Options in substitution
for such Options, provided such action is permissible under Section
422 of the Code and the Florida Securities Rules. Notwithstanding the
provisions of this Section 5(k), however, no modification of an Option
shall, without the consent of the Optionee, alter to the Optionee's
detriment or impair any rights or obligations under any Option
theretofore granted under the Plan.
(l) Exercise Before Exercise Date: At the discretion of the Board, the
Option may, but need not, include a provision whereby the Optionee may
elect to exercise all or any portion of the Option prior to the stated
exercise date of the Option or any installment thereof. Any shares so
purchased prior to the stated exercise date shall be subject to
repurchase by the Company upon termination of Optionee's employment as
contemplated by Section 5(n) hereof prior to the exercise date stated
in the Option and such other restrictions and conditions as the Board
or Committee may deem advisable.
(m) Other Provisions: The Option agreements authorized under the Plan
----------------- shall contain such other provisions, including,
without limitation, restrictions upon the exercise of the Options, as
the Board or the Committee shall deem advisable. Shares shall not be
issued pursuant to the exercise of an Option, if the exercise of such
Option or the issuance of shares thereunder would violate, in the
opinion of legal counsel for the Company, the provisions of any
applicable law or the rules or regulations of any applicable
governmental or administrative agency or body, such as the Code, the
Securities Act, the Exchange Act, the Florida Securities Rules,
Florida corporation law, and the rules promulgated under the foregoing
or the rules and regulations of any exchange upon which the shares of
the Company are listed. Without limiting the generality of the
foregoing, the exercise of each Option shall be subject to the
condition that if at any time the Company shall determine that (i) the
satisfaction of withholding tax or other similar liabilities, or (ii)
the listing, registration or qualification of any shares covered by
such exercise upon any securities exchange or under any state or
federal law, or (iii) the consent or approval of any regulatory body,
or (iv) the perfection of any exemption from any such withholding,
listing, registration, qualification, consent or approval is necessary
or desirable in connection with such exercise or the issuance of
shares thereunder, then in any such event, such exercise shall not be
effective unless such withholding, listing registration,
qualification, consent, approval or exemption shall have been
effected, obtained or perfected free of any conditions not acceptable
to the Company.
(n) Repurchase Agreement: The Board may, in its discretion, require as a
--------------------- condition to the Grant of an Option hereunder,
that an Optionee execute an agreement with the Company, in form and
substance satisfactory to the Board in its discretion ("Repurchase
Agreement"), (i) restricting the Optionee's right to transfer shares
purchased under such Option without first offering such shares to the
Company or another shareholder of the Company upon the same terms and
conditions as provided therein; and (ii) providing that upon
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termination of Optionee's employment with the Company, for any reason,
the Company (or another shareholder of the Company, as provided in the
Repurchase Agreement) shall have the right at its discretion (or the
discretion of such other shareholders) to purchase and/or redeem all
such shares owned by the Optionee on the date of termination of his or
her employment at a price equal to: (A) the fair value of such shares
as of such date of termination; or (B) if such repurchase right lapses
at 20% of the number of shares per year, the original purchase price
of such shares, and upon terms of payment permissible under the
Florida securities rules; provided that in the case of Options or
Stock Awards granted to officers, directors, consultants or affiliates
of the Company, such repurchase provisions may be subject to
additional or greater restrictions as determined by the Board or
Committee.
6. Stock Awards and Restricted Stock Purchase Offers.
(a) Types of Grants.
(i) Stock Award. All or part of any Stock Award under the Plan may be
subject to conditions established by the Board or the Committee,
and set forth in the Stock Award Agreement, which may include,
but are not limited to, continuous service with the Company,
achievement of specific business objectives, increases in
specified indices, attaining growth rates and other comparable
measurements of Company performance. Such Awards may be based on
Fair Market Value or other specified valuation. All Stock Awards
will be made pursuant to the execution of a Stock Award Agreement
substantially in the form attached hereto as Exhibit C.
(ii) Restricted Stock Purchase Offer. A Grant of a Restricted Stock
Purchase Offer under the Plan shall be subject to such (i)
vesting contingencies related to the Participant's continued
association with the Company for a specified time and (ii) other
specified conditions as the Board or Committee shall determine,
in their sole discretion, consistent with the provisions of the
Plan. All Restricted Stock Purchase Offers shall be made pursuant
to a Restricted Stock Purchase Offer substantially in the form
attached hereto as Exhibit D.
(b) Conditions and Restrictions. Shares of Stock which Participants may
----------------------------- receive as a Stock Award under a Stock
Award Agreement or Restricted Stock Purchase Offer under a Restricted
Stock Purchase Offer may include such restrictions as the Board or
Committee, as applicable, shall determine, including restrictions on
transfer, repurchase rights, right of first refusal, and forfeiture
provisions. When transfer of Stock is so restricted or subject to
forfeiture provisions it is referred to as "Restricted Stock".
Further, with Board or Committee approval, Stock Awards or Restricted
Stock Purchase Offers may be deferred, either in the form of
installments or a future lump sum distribution. The Board or Committee
may permit selected Participants to elect to defer distributions of
Stock Awards or Restricted Stock Purchase Offers in accordance with
procedures established by the Board or Committee to assure that such
deferrals comply with applicable requirements of the Code including,
at the choice of Participants, the capability to make further
deferrals for distribution after retirement. Any deferred
distribution, whether elected by the Participant or specified by the
Stock Award Agreement, Restricted Stock Purchase Offers or by the
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Board or Committee, may require the payment be forfeited in accordance
with the provisions of Section 6(c). Dividends or dividend equivalent
rights may be extended to and made part of any Stock Award or
Restricted Stock Purchase Offers denominated in Stock or units of
Stock, subject to such terms, conditions and restrictions as the Board
or Committee may establish.
(c) Cancellation and Rescission of Grants. Unless the Stock Award
Agreement or Restricted Stock Purchase Offer specifies otherwise, the
Board or Committee, as applicable, may cancel any unexpired, unpaid,
or deferred Grants at any time if the Participant is not in compliance
with all other applicable provisions of the Stock Award Agreement or
Restricted Stock Purchase Offer, the Plan and with the following
conditions:
(i) A Participant shall not render services for any organization or
engage directly or indirectly in any business which, in the
judgment of the chief executive officer of the Company or other
senior officer designated by the Board or Committee, is or
becomes competitive with the Company, or which organization or
business, or the rendering of services to such organization or
business, is or becomes otherwise prejudicial to or in conflict
with the interests of the Company. For Participants whose
employment has terminated, the judgment of the chief executive
officer shall be based on the Participant's position and
responsibilities while employed by the Company, the Participant's
post-employment responsibilities and position with the other
organization or business, the extent of past, current and
potential competition or conflict between the Company and the
other organization or business, the effect on the Company's
customers, suppliers and competitors and such other
considerations as are deemed relevant given the applicable facts
and circumstances. A Participant who has retired shall be free,
however, to purchase as an investment or otherwise, stock or
other securities of such organization or business so long as they
are listed upon a recognized securities exchange or traded
over-the-counter, and such investment does not represent a
substantial investment to the Participant or a greater than ten
percent (10%) equity interest in the organization or business.
(ii) A Participant shall not, without prior written authorization from
the Company, disclose to anyone outside the Company, or use in
other than the Company's business, any confidential information
or material, as defined in the Company's Proprietary Information
and Invention Agreement or similar agreement regarding
confidential information and intellectual property, relating to
the business of the Company, acquired by the Participant either
during or after employment with the Company.
(iii)A Participant, pursuant to the Company's Proprietary Information
and Invention Agreement, shall disclose promptly and assign to
the Company all right, title and interest in any invention or
idea, patentable or not, made or conceived by the Participant
during employment by the Company, relating in any manner to the
actual or anticipated business, research or development work of
the Company and shall do anything reasonably necessary to enable
the Company to secure a patent where appropriate in the United
States and in foreign countries.
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(iv) Upon exercise, payment or delivery pursuant to a Grant, the
Participant shall certify on a form acceptable to the Committee
that he or she is in compliance with the terms and conditions of
the Plan. Failure to comply with all of the provisions of this
Section 6(c) prior to, or during the six months after, any
exercise, payment or delivery pursuant to a Grant shall cause
such exercise, payment or delivery to be rescinded. The Company
shall notify the Participant in writing of any such rescission
within two years after such exercise, payment or delivery. Within
ten days after receiving such a notice from the Company, the
Participant shall pay to the Company the amount of any gain
realized or payment received as a result of the rescinded
exercise, payment or delivery pursuant to a Grant. Such payment
shall be made either in cash or by returning to the Company the
number of shares of Stock that the Participant received in
connection with the rescinded exercise, payment or delivery.
(d) Nonassignability.
(i) Except pursuant to Section 6(e)(iii) and except as set forth in
Section 6(d)(ii), no Grant or any other benefit under the Plan
shall be assignable or transferable, or payable to or exercisable
by, anyone other than the Participant to whom it was granted.
(ii) Where a Participant terminates employment and retains a Grant
pursuant to Section 6(e)(ii) in order to assume a position with a
governmental, charitable or educational institution, the Board or
Committee, in its discretion and to the extent permitted by law,
may authorize a third party (including but not limited to the
trustee of a "blind" trust), acceptable to the applicable
governmental or institutional authorities, the Participant and
the Board or Committee, to act on behalf of the Participant with
regard to such Awards.
(e) Termination of Employment. If the employment or service to the Company
of a Participant terminates, other than pursuant to any of the
following provisions under this Section 6(e), all unexercised,
deferred and unpaid Stock Awards or Restricted Stock Purchase Offers
shall be cancelled immediately, unless the Stock Award Agreement or
Restricted Stock Purchase Offer provides otherwise:
(i) Retirement Under a Company Retirement Plan. When a Participant's
employment terminates as a result of retirement in accordance
with the terms of a Company retirement plan, the Board or
Committee may permit Stock Awards or Restricted Stock Purchase
Offers to continue in effect beyond the date of retirement in
accordance with the applicable Grant Agreement and the
exercisability and vesting of any such Grants may be accelerated.
(ii) Rights in the Best Interests of the Company. When a Participant
resigns from the Company and, in the judgment of the Board or
Committee, the acceleration and/or continuation of outstanding
Stock Awards or Restricted Stock Purchase Offers would be in the
best interests of the Company, the Board or Committee may (i)
authorize, where appropriate, the acceleration and/or
continuation of all or any part of Grants issued prior to such
termination and (ii) permit the exercise, vesting and payment of
such Grants for such period as may be set forth in the applicable
Grant Agreement, subject to earlier cancellation pursuant to
Section 9 or at such time as the Board or Committee shall deem
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the continuation of all or any part of the Participant's Grants
are not in the Company's best interest.
(iii) Death or Disability of a Participant.
(1) In the event of a Participant's death, the Participant's
estate or beneficiaries shall have a period up to the
expiration date specified in the Grant Agreement within
which to receive or exercise any outstanding Grant held by
the Participant under such terms as may be specified in the
applicable Grant Agreement. Rights to any such outstanding
Grants shall pass by will or the laws of descent and
distribution in the following order: (a) to beneficiaries so
designated by the Participant; if none, then (b) to a legal
representative of the Participant; if none, then (c) to the
persons entitled thereto as determined by a court of
competent jurisdiction. Grants so passing shall be made at
such times and in such manner as if the Participant were
living.
(2) In the event a Participant is deemed by the Board or
Committee to be unable to perform his or her usual duties by
reason of mental disorder or medical condition which does
not result from facts which would be grounds for termination
for cause, Grants and rights to any such Grants may be paid
to or exercised by the Participant, if legally competent, or
a committee or other legally designated guardian or
representative if the Participant is legally incompetent by
virtue of such disability.
(3) After the death or disability of a Participant, the Board or
Committee may in its sole discretion at any time (1)
terminate restrictions in Grant Agreements; (2) accelerate
any or all installments and rights; and (3) instruct the
Company to pay the total of any accelerated payments in a
lump sum to the Participant, the Participant's estate,
beneficiaries or representative; notwithstanding that, in
the absence of such termination of restrictions or
acceleration of payments, any or all of the payments due
under the Grant might ultimately have become payable to
other beneficiaries.
(4) In the event of uncertainty as to interpretation of or
controversies concerning this Section 6, the determinations
of the Board or Committee, as applicable, shall be binding
and conclusive.
7. Investment Intent. All Grants under the Plan are intended to be exempt from
registration under the Securities Act provided by Rule 701 thereunder.
Unless and until the granting of Options or sale and issuance of Stock
subject to the Plan are registered under the Securities Act or shall be
exempt pursuant to the rules promulgated thereunder, each Grant under the
Plan shall provide that the purchases or other acquisitions of Stock
thereunder shall be for investment purposes and not with a view to, or for
resale in connection with, any distribution thereof. Further, unless the
issuance and sale of the Stock have been registered under the Securities
Act, each Grant shall provide that no shares shall be purchased upon the
exercise of the rights under such Grant unless and until (i) all then
applicable requirements of state and federal laws and regulatory agencies
shall have been fully complied with to the satisfaction of the Company and
its counsel, and (ii) if requested to do so by the Company, the person
exercising the rights under the Grant shall (i) give written assurances as
to knowledge and experience of such person (or a representative employed by
such person) in financial and business matters and the ability of such
person (or representative) to evaluate the merits and risks of exercising
the Option, and (ii) execute and deliver to the Company a letter of
investment intent and/or such other form related to applicable exemptions
from registration, all in such form and substance as the Company may
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require. If shares are issued upon exercise of any rights under a Grant
without registration under the Securities Act, subsequent registration of
such shares shall relieve the purchaser thereof of any investment
restrictions or representations made upon the exercise of such rights.
8. Amendment, Modification, Suspension or Discontinuance of the Plan. The
Board may, insofar as permitted by law, from time to time, with respect to
any shares at the time not subject to outstanding Grants, suspend or
terminate the Plan or revise or amend it in any respect whatsoever, except
that without the approval of the shareholders of the Company, no such
revision or amendment shall (i) increase the number of shares subject to
the Plan, (ii) decrease the price at which Grants may be granted, (iii)
materially increase the benefits to Participants, or (iv) change the class
of persons eligible to receive Grants under the Plan; provided, however, no
such action shall alter or impair the rights and obligations under any
Option, or Stock Award, or Restricted Stock Purchase Offer outstanding as
of the date thereof without the written consent of the Participant
thereunder. No Grant may be issued while the Plan is suspended or after it
is terminated, but the rights and obligations under any Grant issued while
the Plan is in effect shall not be impaired by suspension or termination of
the Plan.
In the event of any change in the outstanding Stock by reason of a
stock split, stock dividend, combination or reclassification of shares,
recapitalization, merger, or similar event, the Board or the Committee may
adjust proportionally (a) the number of shares of Stock (i) reserved under
the Plan, (ii) available for Incentive Stock Options and Nonstatutory
Options and (iii) covered by outstanding Stock Awards or Restricted Stock
Purchase Offers; (b) the Stock prices related to outstanding Grants; and
(c) the appropriate Fair Market Value and other price determinations for
such Grants. In the event of any other change affecting the Stock or any
distribution (other than normal cash dividends) to holders of Stock, such
adjustments as may be deemed equitable by the Board or the Committee,
including adjustments to avoid fractional shares, shall be made to give
proper effect to such event. In the event of a corporate merger,
consolidation, acquisition of property or stock, separation, reorganization
or liquidation, the Board or the Committee shall be authorized to issue or
assume stock options, whether or not in a transaction to which Section
424(a) of the Code applies, and other Grants by means of substitution of
new Grant Agreements for previously issued Grants or an assumption of
previously issued Grants.
9. Tax Withholding. The Company shall have the right to deduct applicable
taxes from any Grant payment and withhold, at the time of delivery or
exercise of Options, Stock Awards or Restricted Stock Purchase Offers or
vesting of shares under such Grants, an appropriate number of shares for
payment of taxes required by law or to take such other action as may be
necessary in the opinion of the Company to satisfy all obligations for
withholding of such taxes. If Stock is used to satisfy tax withholding,
such stock shall be valued based on the Fair Market Value when the tax
withholding is required to be made.
10. Availability of Information. During the term of the Plan and any additional
period during which a Grant granted pursuant to the Plan shall be
exercisable, the Company shall make available, not later than one hundred
and twenty (120) days following the close of each of its fiscal years, such
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financial and other information regarding the Company as is required by the
bylaws of the Company and applicable law to be furnished in an annual
report to the shareholders of the Company.
11. Notice. Any written notice to the Company required by any of the provisions
of the Plan shall be addressed to the chief personnel officer or to the
chief executive officer of the Company, and shall become effective when it
is received by the office of the chief personnel officer or the chief
executive officer.
12. Indemnification of Board. In addition to such other rights or
indemnifications as they may have as directors or otherwise, and to the
extent allowed by applicable law, the members of the Board and the
Committee shall be indemnified by the Company against the reasonable
expenses, including attorneys' fees, actually and necessarily incurred in
connection with the defense of any claim, action, suit or proceeding, or in
connection with any appeal thereof, to which they or any of them may be a
party by reason of any action taken, or failure to act, under or in
connection with the Plan or any Grant granted thereunder, and against all
amounts paid by them in settlement thereof (provided such settlement is
approved by independent legal counsel selected by the Company) or paid by
them in satisfaction of a judgment in any such claim, action, suit or
proceeding, except in any case in relation to matters as to which it shall
be adjudged in such claim, action, suit or proceeding that such Board or
Committee member is liable for negligence or misconduct in the performance
of his or her duties; provided that within sixty (60) days after
institution of any such action, suit or Board proceeding the member
involved shall offer the Company, in writing, the opportunity, at its own
expense, to handle and defend the same.
13. Governing Law. The Plan and all determinations made and actions taken
pursuant hereto, to the extent not otherwise governed by the Code or the
securities laws of the United States, shall be governed by the law of the
State of Florida and construed accordingly.
14. Effective and Termination Dates. The Plan shall become effective on the
date it is approved by the holders of a majority of the shares of Stock
then outstanding. The Plan shall terminate ten years later, subject to
earlier termination by the Board pursuant to Section 8.
The foregoing 2004 Incentive Stock Plan (consisting of 14 pages, including
this page) was duly adopted and approved by the Board of Directors on April 19,
2004.
BEVSYSTEMS INTERNATIONAL, INC.,
a Florida corporation
By:__________________________
[ ]
Its: Chief Executive Officer
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