EXHIBIT 10.1
UNIVERSAL SECURITY INSTRUMENTS, INC.
NON-QUALIFIED STOCK OPTION PLAN
1. Purpose - The purpose of this Plan is to further the interests of
UNIVERSAL SECURITY INSTRUMENTS, INC. (hereinafter called the "Company") by
providing incentives for employees, officers and directors of the Company and
its subsidiaries, who may be designated for participation therein and to provide
additional means of attracting and retaining competent personnel.
2. Administration - The Plan shall be administered by a Committee
consisting of the Board of Directors of the Company or such lesser number of
such Board (but not less than three persons) as is designated by the Board. Such
Committee shall hereinafter be referred to as the "Non-Qualified Stock Option
Committee" or the "Committee." Subject to the provisions of the Plan and
applicable law, the Committee is authorized to interpret the Plan and to
prescribe, amend and rescind rules and regulations relating to the Plan and to
any options granted thereunder, and administration of the Plan.
3. Participants and Allotments - The Committee shall determine and
designate from time to time those employees and directors of the Company to whom
options are to be granted and who thereby become participants in the Plan. The
Committee shall allot to such participants options to purchase shares in such
amounts as the Committee shall from time to time determine. Employees, officers
and directors of the Company or its subsidiaries shall be eligible to
participate in the Plan. No member of the Committee shall have any right to vote
or decide upon any matter relating solely to himself or a member of his
immediate family or solely to any of his rights or benefits (or rights or
benefits of a member of his immediate family) under the Plan. Participation of a
member shall not confer any right of continuation of service as an employee,
officer or a director of the Company or its subsidiaries.
4. Shares Subject to the Plan - Under this Plan, the Committee may from
time to time grant options to employees, officers and directors of the Company
and its subsidiaries, entitling the holders thereof to purchase shares of the
Company's authorized and unissued common stock, par value $.01 per share (the
"Common Stock"), or shares of the Company's treasury Common Stock, or a
combination of both, up to an aggregate of 975,000 shares of Common Stock.
Notwithstanding anything herein to the contrary, no member of the Committee
shall be eligible to vote on the granting of any option under the Plan if the
option is to be granted to such member of the Committee or to a member of his
immediate family. If any option granted under the Plan shall terminate or expire
unexercised, in whole or in part, the shares so released from option may be made
the subject of additional options granted under the Plan. The Company shall
reserve and keep available such number of shares of stock as will satisfy the
requirements of all outstanding options granted under the Plan. In the event
there is any change in the Company's shares of Common Stock, as by stock splits,
reverse stock splits, stock dividends or recapitalization, the number of shares
available for option and the shares subject to option shall be appropriately
adjusted by the Committee.
5. Option Price - The option price or prices shall be as established by the
Committee when such option is granted on the date or dates the options are
granted. In the event there is any change in the Company's shares as by stock
splits, reverse stock splits, stock dividends or recapitalization, the purchase
price of shares subject to option shall be appropriately adjusted by the
Committee.
6. Other Provisions - Each option shall be subject to all provisions of
this Plan and to the following terms and conditions:
(a) Options will be granted will be granted under the Plan which will be
exercisable for a period of five years from the date of grant. The Committee
may, in its discretion, impose additional restrictions as to the time of
exercise and/or number of shares that may be purchased upon any exercise of
options.
(b) No option shall be transferable by the optionee otherwise than by
will or the laws of descent and distribution and shall be exercisable during his
lifetime only by the optionee.
(c) All unexercised options will terminate, be forfeited and will lapse
immediately if (i) the optionee's employment with the Company or its
subsidiaries is terminated because the Optionee is discharged for dishonesty,
commission of a felony or the intentional committing of an act which has a
material adverse effect or impact upon the Company or its subsidiaries, such as
his disclosing Company confidential information or trade secrets to an
unauthorized person or persons, or (ii) the optionee agrees to accept employment
with a competitor of the Company or its subsidiaries without the consent of the
Company.
(d) If the optionee's employment with the Company or its subsidiaries is
terminated for any reason other than as set forth in subparagraph (c) above, or
if the optionee ceases to be a director of the Company or its subsidiaries, the
Optionee may exercise, subject to the provisions of subparagraph (a) and (c)
above, any option which has accrued hereunder as of the date his employment with
the Company or its subsidiaries terminated or as of the date he ceases to be a
director (as may be the case) for the period of ninety (90) days after the date
of the termination of his employment with, or his termination as a director of,
the Company or its subsidiaries; provided, however, that if the optionee's
employment (or being a director, as may be the case) with the Company or its
subsidiaries is terminated by reason of his death, the optionee's personal
representatives, estate or heirs (as the case may be) may exercise, subject to
the provisions of subparagraph (a) above, any option which has accrued hereunder
as of the date of the optionee's death for a period of one hundred eighty (180)
days after the date of the optionee's death.
(e) Except as otherwise provided in subparagraph (d) above, all
unexercised options will terminate, be forfeited and will lapse upon the
termination of the optionee's employment with the Company or its subsidiaries
(or upon the termination of his being a director of the Comp any or its
subsidiaries, as the case may be).
7. Exercise of Options - To exercise the option, the optionee or his
successor shall give written notice to the Company's Chief Financial Officer at
the Company's principal office in Baltimore, Maryland, accompanied by full
payment for the shares being purchased and a written statement that the shares
are purchased for investment and not with a view to distribution. However, this
statement will not be required in the event the shares subject to the option are
registered with the Securities and Exchange Commission. If the option is
exercised by the successor of the optionee, following his death, proof shall be
submitted, satisfactory to the Committee, of the right of the successor to
exercise the option.
Shares of the stock issues pursuant to this Plan which have not registered
with the Securities and Exchange Commission shall bear the following legend:
"The shares represented by this certificate
have not been registered under the Securities
Act of 1933 and may be offered or sold only if
registered under the provisions of that Act or
if an exemption from registration is available."
The Company shall not be required to transfer or deliver any certificate or
certificates for shares purchased upon any such exercise of said option: (a)
until after compliance with all then applicable requirements of law; and (b)
prior to admission of such shares to listing on any stock exchange on which the
stock may then be listed. In no event shall the Company be required to issue
fractional shares to the employee, officer or director.
8. Registration - If the Company shall be advised by its counsel that
shares of stock deliverable upon any exercise of an option are required to be
registered under the Securities Act of 1933, or that the consent of any other
authority is required for the issuance of same, the Company may effect
registration or obtain consent, and delivery of shares by the Company may be
deferred until registration is effected or consent obtained. However, the
Company reserves the right to revoke the option if it determines that, in the
best interests of the Company, the shares should not be registered or that
consent should not be obtained.
9. Issuance of Stock - No stock will be issued until full payment for such
stock has been made. The Optionee shall have no rights as a shareholder with
respect to optioned shares until the date of the issuance of a stock certificate
to him for such shares. 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 certificate
is issued, except as provided in Paragraphs 4 or 5.
10. Amendments and Termination - The Board of Directors may amend, suspend,
discontinue or terminate the Plan, but no such action may, without the consent
of the holder of any option granted hereunder, alter or impair such option,
except as provided in Paragraphs 4 and 5.
11. Option Agreement - The granting of an option shall take place only when
a written option agreement substantially in the form of the Option Agreement
which is attached hereto and marked Exhibit I is executed by or on behalf of the
Company and the employee, officer or director to whom the option is granted and
such executed agreement is delivered to Company.
12. Period of Plan - The Plan, which initially became effective on April 5,
1978, has been extended by the Board of Directors and will continue in effect
until and will expire on March 31, 2003.
UNIVERSAL SECURITY INSTRUMENTS, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of this ___ day of _________, 19__ by and between
UNIVERSAL SECURITY INSTRUMENTS, INC., a Maryland corporation (hereinafter called
the Company), and ___________________ (hereinafter called the Optionee).
WHEREAS, the Board of Directors of the Company considers it desirable and
in the Company's best interest that the Optionee be given an opportunity to
purchase shares of its Common Stock to provide an inducement for the Optionee to
remain an employee of the Company and to promote the success of the Company.
NOW, THEREFORE, in consideration of the premises, it is agreed as follows:
l. Grant of Option. The Company hereby grants to Optionee the right,
privilege and option to purchase from the Company _________ shares of the Common
Stock of the Company at a purchase price of $_____ per share in the manner and
subject to the conditions hereinafter provided.
2. Period of Exercise of Option.
(a) The option will be exercisable for a period of __________ years from
the date of grant, except as provided in subparagraphs (b), (c) and (d) below,
in accordance with the following schedule:
(INSERT EXERCISE SCHEDULE)
(b) All unexercised options will terminate, be forfeited and will lapse
immediately if the Optionee's employment with the Company is terminated because
(i) the Optionee is discharged for dishonesty, commission of a felony or the
intentional committing of an act which has a material adverse effect or impact
upon the Company, such as disclosing Company confidential information or trade
secrets to an unauthorized person or persons, or (ii) the Optionee accepts
employment with a competitor of the Company, without the consent of the Company.
(c) If the Optionee's employment with the Company is terminated for any
reason other than as set forth in subparagraph (b) above, the Optionee may
exercise, subject to the provisions of subparagraph (a) above, any option which
as accrued hereunder as of the date of employment with the Company terminated
for a period of ninety (90) days after the date of the termination of employment
with the Company; provided, however, that if the Optionee's employment with the
Company is terminated by reason of death, the Optionee's personal
representatives, estate or heirs (as the case may be) may exercise, subject to
the provisions of subparagraph (a) above, any option which has accrued hereunder
as of the date of the Optionee's death for a period of one hundred eighty (l80)
days after the date of the Optionee's death.
(d) Except as otherwise provided in subparagraph (c) above, all
unexercised options will terminate, be forfeited and will lapse upon the
termination of the Optionee's employment with the Company.
3. Method of Exercise. In order to exercise the option, the holder thereof
must give written notice to the Secretary of the Company at Baltimore, Maryland,
accompanied by full payment of the shares being purchased and a written
statement that the shares are purchased for investment and not with a view to
distribution. If the option is exercised by the successor of the Optionee
following death, proof shall be submitted to the right of the successor to
exercise the option. Shares of stock issued pursuant to this Plan which have not
been registered with the Securities and Exchange Commission shall bear the
following legend:
"The shares represented by this
Certificate have not been registered
under the Securities Act of l933 and
may be offered or sold only if
registered under the provisions of
that Act or if an exemption from
registration is available."
The Company shall not be required to transfer or deliver any certificate or
certificates for shares purchased upon any such exercise of said option: (a)
until after compliance with all then applicable requirements of law; and (b)
prior to admission of such shares to listing on any stock exchange on which the
stock may then be listed. In no event shall the Company be required to issue
fractional shares to the Optionee.
4. Limitation upon Transfer. Except as otherwise provided in paragraph 2
hereof, the option and all rights granted hereunder shall not be transferred by
the Optionee, other than by will or by laws of descent and distribution, and may
not be assigned, pledged or hypothecated in any way and shall not be subject to
execution, attachment or similar process. Upon any attempt to transfer the
options, other than by will or by the laws of descent and distribution, or to
assign, pledge, hypothecate or otherwise dispose of such option or of any rights
granted hereunder, contrary to the provisions hereof, or upon the levy of any
attachment or similar process upon such option or such rights, such option and
such rights shall immediately become null and void.
5. Stock Adjustment. In the event there is any change in the number of
issued shares of the Company by reason of stock splits, reverse stock splits,
stock dividends, recapitalization or other transactions, the number of shares
remaining subject to the option and the option price per share shall be
proportionately adjusted.
6. Corporate Reorganization. If there shall be any capital reorganization
or consolidation or merger of the Company with another corporation or
corporations, or any sale of all or substantially all of the Company's
properties and assets to any other corporation or corporations, the Company
shall take such action as may be necessary to enable Optionee to receive upon
any subsequent exercise of such option, in whole or in part, in lieu of shares
of Common Stock, securities or other assets as were issuable or payable upon
such reorganization, consolidation, merger or sale in respect of, or in exchange
for such shares of Common Stock.
7. Rights of Stockholder. Neither Optionee, legal representatives, nor any
other person entitled to exercise such option shall have any rights or be a
stockholder in the Company in respect of the shares issuable upon exercise of
the option granted hereunder, unless and until certificates representing such
shares shall have been delivered pursuant to the terms hereof.
8. Stock Reserved. The Company shall, at all times during the term of this
Agreement, reserve and keep available such number of shares of its Common Stock
as will be sufficient to satisfy the terms of this Agreement.
9. Binding Effect. This Agreement shall be binding upon and inure to the
benefit of any successor or successors of Company.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed the day and year first above written.
ATTEST: UNIVERSAL SECURITY INSTRUMENTS, INC.
(Company)
___________________________ By: __________________________(SEAL)
President
WITNESS: (Optionee)
___________________________ ______________________________(SEAL)