UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C
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 Only (as permitted by Rule
14c-5(d) (2))
/X/ Definitive Information Statement
MT ULTIMATE HEALTHCARE CORP.
------------------------------------------------
(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:
(2) Aggregate number of securities to which transaction applies:
(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):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / 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:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
MT ULTIMATE HEALTHCARE CORP.
18301 Von Karman, Suite 205
Irvine, CA 92612
NOTICE OF ACTION TO BE TAKEN PURSUANT TO A WRITTEN CONSENT TO ACTION
WITHOUT A MEETING OF STOCKHOLDERS
To be taken on March 31, 2006
To the stockholders of MT Ultimate Healthcare Corp. (the "Company"):
Notice is hereby given that our majority stockholders, pursuant to a
signed written consent to action without a meeting, will affect the following:
1. To approve an amendment of our Articles of Incorporation, as amended,
(a) to change the Company's name to "Monarch Staffing, Inc.", (b) to
re-authorize (after giving effect to the reverse stock split
described herein) 400,000,000 authorized shares of our common stock
having a par value of $0.001 per share, and (c) to authorize the
creation of 5,000,000 shares of "blank check" preferred stock;
2. To approve a reverse stock split of our common stock such that each
ninety (90) shares of our common stock issued and outstanding as of
March 31, 2006 shall automatically be reclassified and
continued, without any action on the part of the holder thereof, as
one share of common stock; and
3. To approve the MT Ultimate Healthcare Corp. 2005 Stock Incentive
Plan.
Common stockholders of record on the close of business on February
27, 2006 are entitled to notice of the consent to action; however, the
majority stockholders do not need your vote to effect the changes above.
This notice is accompanied by an Information Statement that provides details
of each of the proposals.
THIS IS NOT A NOTICE OF AN ANNUAL OR SPECIAL MEETING OF STOCKHOLDERS AND NO
STOCKHOLDER MEETING WILL BE HELD TO CONSIDER ANY OF THE MATTERS LISTED ABOVE.
By Order of the Board of Directors,
/s/ David Walters
David Walters
Chief Executive Officer and Director
March 6, 2006
1
MT ULTIMATE HEALTHCARE CORP.
18301 Von Karman, Suite 205
Irvine, CA 92612
INFORMATION STATEMENT
This Information Statement is being furnished by the Board of Directors
of MT Ultimate Healthcare Corp. (the "Company") to provide notice of the
majority stockholders' intent to give their signed written consent to action
without a meeting to approve an amendment to the Company's Articles of
Incorporation, as amended, to change the Company's name to Monarch Staffing,
Inc., to re-authorize (after giving effect to the reverse stock split
described herein) 400,000,000 authorized shares of our common stock having a
par value of $0.001 per share, and to authorize the creation of 5,000,000
shares of blank check preferred stock; to approve a one-for-ninety reverse
stock split of our common stock; and to approve the MT Ultimate Healthcare
Corp. 2005 Stock Incentive Plan (the "Plan").
The record date for determining stockholders entitled to receive this
Information Statement has been established as the close of business on
February 27, 2006 (the "Record Date"). This Information Statement will be
first mailed on or about March 6, 2006 to stockholders of record at
the close of business on the Record Date. As of the Record Date, there were
outstanding 364,909,120 shares of the Company's common stock. The
holders of all outstanding shares of common stock are entitled to one vote per
share of common stock registered in their names on the books of the Company at
the close of business on the Record Date. The actions to be taken pursuant to
the written consent shall be taken on or about March 31, 2006.
The changes to the Company's Articles of Incorporation, the approval of
a one-for-ninety reverse stock split of our common stock, and the approval of
the Plan are required to be approved by a majority of the outstanding shares
of common stock of the Company outstanding as of the Record Date. David
Walters, a Director of the Company and the Company's Chief Executive Officer,
and Keith Moore, a Director of the Company, (the "Majority Stockholders") can
vote an aggregate of 274,500,000 shares (or 75.2%) of our outstanding common
stock and will be able to approve the matters presented in this Information
Statement. The Company is not soliciting your vote as the Majority
Stockholders will give their signed written consent to action without meeting,
and already have the vote in hand.
There are no dissenters' rights applicable to the changes to the
Company's Articles of Incorporation, the approval of a one-for-ninety reverse
stock split of our common stock, or the approval of the Plan.
We Are Not Asking You for a Proxy and You are Requested
Not To Send Us a Proxy.
2
PROPOSAL 1
AMENDMENT TO ARTICLES OF INCORPORATION
WHAT ARE THE MAJORITY STOCKHOLDERS APPROVING?
Our Majority Stockholders will approve an amendment of our Articles of
Incorporation, as amended, to change the Company's name to "Monarch Staffing,
Inc.", to re-authorize (after giving effect to the reverse stock split
described herein) 400,000,000 authorized shares of our common stock having a
par value of $0.001 per share, and to authorize the creation of 5,000,000
shares of "blank check" preferred stock.
Upon approval, the Board of Directors will instruct the officers to file
as soon as practicable a Certificate of Amendment with the Nevada Secretary of
State in a form substantially similar to the attached "Appendix A" to affect
the amendment. There follows a summary of the material terms of the
Certificate of Amendment.
WHAT IS THE PURPOSE OF THE AMENDMENT?
Name Change
- -----------
The Board of Directors believes it is in the best interest of the Company to
affect the name change to "Monarch Staffing, Inc." to better reflect the
Company's expanded business focus of medical and technical staffing services.
During November 2005, the Company acquired 100% of the issued and outstanding
shares of iTechexpress, Inc. ("iTech") and iTech acquired 100% of the issued
and outstanding shares of Drug Consultants, Inc. ("DCI"). iTech places
technicians into various technical staffing jobs in both commercial and
government sectors, including for clients such as Best Buy, Equant NV and
Office Depot. DCI furnishes personnel to perform a range of pharmacy
technician, nursing and other health care services in support of the
operations of government and commercial facilities, including the State of
California. In December 2005, we also disposed of certain other of our prior
assets and businesses, including rights to the "MT" and "Ultimate" names.
Re-Authorization of Common Stock
- --------------------------------
The amendment to our Articles of Incorporation will re-authorize (after giving
effect to the Reverse Stock Split described herein) 400,000,000 shares of our
common stock having a par value of $0.001 per share. The reasons for, and
potential effects on existing stockholders from, this re-authorization are
discussed below under "Proposal 2-Approval of Reverse Stock Split."
Creation of Blank Check Preferred Stock
- ---------------------------------------
The amendment to our Articles of Incorporation will create 5,000,000
authorized shares of "blank check" preferred stock. The term "blank check"
refers to preferred stock, the creation and issuance of which is authorized in
advance by the stockholders and the terms, rights and features of which are
determined by the board of directors of the Company upon issuance. The
authorization of such blank check preferred stock would permit the board of
directors to authorize and issue preferred stock from time to time in one or
more series.
3
Subject to the provisions of the Company's Articles of Incorporation and
the limitations prescribed by law, the board of directors would be expressly
authorized, at its discretion, to adopt resolutions to issue shares, to fix
the number of shares and to change the number of shares constituting any
series and to provide for or change the voting powers, designations,
preferences and relative, participating, optional or other special rights,
qualifications, limitations or restrictions thereof, including dividend rights
(including whether the dividends are cumulative), dividend rates, terms of
redemption (including sinking fund provisions), redemption prices, conversion
rights and liquidation preferences of the shares constituting any series of
the preferred stock, in each case without any further action or vote by the
stockholders. The board of directors would be required to make any
determination to issue shares of preferred stock based on its judgment as to
the best interests of the Company and its stockholders. The amendment to the
Articles of Incorporation would give the board of directors flexibility,
without further stockholder action, to issue preferred stock on such terms and
conditions as the board of directors deems to be in the best interests of the
Company and its stockholders.
The amendment would provide the Company with increased financial
flexibility in meeting future capital requirements by providing another type
of security in addition to its common stock, as it will allow preferred stock
to be available for issuance from time to time and with such features as
determined by the board of directors for any proper corporate purpose. It is
anticipated that such purposes may include exchanging preferred stock for
common stock and, without limitation, may include the issuance for cash as a
means of obtaining capital for use by the Company, or issuance as part or all
of the consideration required to be paid by the Company for acquisitions of
other businesses or assets.
The Company has no present plans, arrangements, commitments or
understandings for the issuance of shares of preferred stock.
If we issue preferred stock that is convertible into shares of our
common stock, our common stockholders may experience substantial dilution of
their investment upon conversion of the preferred stock. The sale of any
shares of common stock issuable upon conversion of preferred stock may
adversely affect the market price of our common stock.
Any issuance of preferred stock with voting rights could, under certain
circumstances, have the effect of delaying or preventing a change in control
of the Company by increasing the number of outstanding shares entitled to vote
and by increasing the number of votes required to approve a change in control
of the Company. Shares of voting or convertible preferred stock could be
issued, or rights to purchase such shares could be issued, to render more
difficult or discourage an attempt to obtain control of the Company by means
of a tender offer, proxy contest, merger or otherwise. The ability of the
board of directors to issue such additional shares of preferred stock, with
the rights and preferences it deems advisable, could discourage an attempt by
a party to acquire control of the Company by tender offer or other means.
Such issuances could therefore deprive stockholders of benefits that could
result from such an attempt, such as the realization of a premium over the
market price that such an attempt could cause. Moreover, the issuance of such
additional shares of preferred stock to persons friendly to the board of
directors could make it more difficult to remove incumbent managers and
directors from office even if such change were to be favorable to stockholders
generally.
While the amendment may have anti-takeover ramifications, the board of
directors believes that the financial flexibility offered by the amendment
outweighs any disadvantages. To the extent that the amendment may have
4
anti-takeover effects, the amendment may encourage persons seeking to acquire
the Company to negotiate directly with the board of directors enabling the
board of directors to consider the proposed transaction in a manner that best
serves the stockholders' interests.
The Board of Directors is not aware of any attempt, or contemplated
attempt, to acquire control of the Company, and this proposal is not being
presented with the intent that it be utilized as a type of anti-takeover
device.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
No director, executive officer, nominee for election as a director,
associate of any director, executive officer, or nominee, or any other person
has any substantial interest, direct or indirect, by security holdings or
otherwise, in the proposed change of the Company's name to "Monarch Staffing,
Inc." that is not shared by all other stockholders.
The proposed re-authorization (together with the reverse stock split
described herein) of 400,000,000 shares of our common stock will permit the
Company to satisfy our existing obligations to issue 235,500,000 shares of our
Common Stock to each of David Walters, our Director and Chief Executive
Officer, and Keith Moore, our Director. These obligations were incurred in
connection with the acquisition of iTech in November 2005.
The proposed authorization of 5,000,000 shares of "blank check"
preferred stock may permit Mr. Walters and Mr. Moore to exercise
greater control over corporate transactions and other matters, even if
their ownership of our Common Stock is diluted to less than a majority as a
result of future share issuances by us or share dispositions by them. Mr.
Walters and Mr. Moore currently can vote an aggregate of 274,500,000
shares (or 75.2%) of our outstanding Common Stock. If their ownership of
our Common Stock is diluted to less than a majority as a result of future
share issuances by us or share dispositions by them, as the sole members
of our Board of Directors, they would have the ability to authorize
and issue preferred stock from time to time in one or more series with terms,
rights and features determined by them. This ability would permit them
control over corporate transactions and other matters, including the power to
cause or prevent a change of control.
No director has opposed any of these actions.
WHAT VOTE IS REQUIRED FOR APPROVAL?
Approval of this proposal requires the affirmative vote of a majority of
the shares of common stock of the Company outstanding as of the Record Date.
David Walters, a Director of the Company and the Company's Chief Executive
Officer, and Keith Moore, a Director of the Company, can vote an aggregate of
274,500,000 shares (or 75.2%) of our outstanding common stock and will be able
to approve this proposal.
IS THE COMPANY ASKING FOR MY PROXY?
Our Board of Directors has unanimously approved the amendment to our
Articles of Incorporation, as amended to change the name of the Company to
"Monarch Staffing, Inc.", to re-authorize (after giving effect to the reverse
stock split described herein) 400,000,000 shares of our common stock having a
par value of $0.001 per share, and to authorize the creation of 5,000,000
shares of "blank check" preferred stock. Our Majority Stockholders will give
their signed written consent to action without a meeting to approve the
amendment to our Articles of Incorporation, as amended. Therefore, we are not
asking for your proxy, and we request that you do not send a proxy, as no
further shareholder approval is either required or sought.
5
PROPOSAL 2
APPROVAL OF REVERSE STOCK SPLIT
WHAT ARE THE MAJORITY STOCKHOLDERS APPROVING?
Our Majority Shareholders will approve a reverse stock split of our
common stock such that each ninety (90) shares of our common stock, par value
$0.001 per share, issued and outstanding as of March 31, 2006 (the
"Pre-Split Common Stock") shall automatically be reclassified and continued,
without any action on the part of the holder thereof, as one share of common
stock, par value $0.001 per share (the "Reverse Stock Split"). We will not
issue fractional shares on account of the Reverse Stock Split. Holders of
Pre-Split Common Stock who would otherwise be entitled to a fraction of a
share on account of the Reverse Stock Split shall be entitled to receive,
without any action on part of the holder thereof, in lieu of such fractional
share, one full share of common stock. We have taken this measure because
there has been no active market for our Pre-Split Common Stock and have been
unable to determine a fair market price. The number of shares of authorized
common stock will remain at 400,000,000 and the par value of common stock will
remain $0.001.
WHAT IS THE PURPOSE OF THE REVERSE STOCK SPLIT?
The primary reason for the Reverse Stock Split (and re-authorization of
400,000,000 million shares of our common stock) is to meet our obligations (a)
to issue 523,333,333 shares of common stock (5,814,815 shares after giving
effect to the Reverse Stock Split) pursuant to obligations resulting from our
acquisition of iTech and (b) to maintain unissued but authorized shares
pursuant to a financing arrangement that we entered into with accredited
investors on November 4, 2005, under which we will sell $3,700,000 in
convertible debentures and warrants to buy 15,700,000 shares of the our common
stock (174,444 shares after giving effect to the Reverse Stock Split). We
currently do not have sufficient unissued but authorized shares for these
purposes.
Following completion of the Reverse Stock Split, we will have
400,000,000 authorized shares of common stock, $0.001 par value per share of
which 4,054,546 will be issued and outstanding. As a result, the Reverse
Stock Split will allow the Company to meets it existing obligations
We also believe that the Reverse Stock Split will provide the Company
with a capital structure more typical of companies at its stage of development
and will provide greater flexibility for the Company, without further
stockholder approval, to issue shares of the Company's common stock from time
to time as may be required for proper business purposes, such as raising
additional capital for ongoing operations, business and asset acquisitions,
establishing strategic relationships with corporate partners, stock splits and
dividends, present and future employee benefit programs and other corporate
purposes.
We anticipate that the Reverse Stock Split will have the effect of
increasing, proportionately, the per share trading price of our common stock.
There can be no assurances, however, that the market price of our common stock
immediately after the Reverse Stock Split will be maintained for any period of
time. Moreover, there can be no assurance that the market price of our common
Stock after the Reverse Stock Split will adjust to reflect the conversion
ratio (e.g., if the market price is $0.004 before the Reverse Stock
Split and the ratio is one (1) share for every ninety (90) shares outstanding
there can be no assurance that the market price for such share immediately
after the reverse split will be $0.36 (90 x $0.004)) ; or that the
market price following the Reverse Stock Split will either exceed or remain in
excess of the then current market price.
6
The following table summarizes the effect of the Reverse Stock Split on
our authorized and outstanding shares of common stock as well as shares of our
common stock reserved for issuance under outstanding obligations.
- ------------------------------------------------------------------------------
Prior to After
Reverse Stock Split Reverse Stock Split
- ------------------------------------ -------------------- --------------------
Authorized Shares of Common Stock 400,000,000 400,000,000
- ------------------------------------ -------------------- -------------------
Outstanding Shares of Common Stock 364,909,120 4,054,546
- ------------------------------------ -------------------- -------------------
Shares of Common Stock Issuable
Under Existing Obligations(1) 523,333,333 5,814,815
- ------------------------------------ -------------------- -------------------
Shares Reserved for Issuance
Pursuant to Convertible Notes(2) 5,262,902,508 58,476,699
- ------------------------------------ -------------------- -------------------
Shares Reserved for Issuance
Pursuant to Warrants(2) 31,400,000 348,888
- ------------------------------------ -------------------- -------------------
Shares Reserved for Issuance
Pursuant to the Plan 100,000,000 1,111,111
- ------------------------------------ -------------------- -------------------
(1) Represents shares issuable pursuant to obligations incurred in connection
with the November 2005 acquisition of iTech. Of this amount, 235,500,000
shares (2,616,667 shares after giving effect to the Reverse Stock Split)
are issuable to each of David Walters, our Director and Chief Executive
Officer, and Keith Moore, our Director.
(2) Represents shares reserved for issuance pursuant to secured convertible
notes and warrants issued or to be issued pursuant to financing
arrangements entered into by the Company in August 2004 and November
2005. Under the financing arrangements, we are obligated to reserve for
issuance 200% of the shares issuable upon conversion of the principal
amount of the secured convertible notes and exercise of the warrants to
take into account the conversion of accrued interest and changes in the
conversion price of the secured convertible notes due to the volatility
of the trading value of the Company's common stock. As of February
24, 2006, the conversion price of the secured convertible notes was
$0.0014 per share and, therefore, a total of 2,631,451,429
shares of our Pre-Split Common Stock were issuable upon conversion
of all of the secured convertible notes.
WHAT EFFECT WILL THE REVERSE STOCK SPLIT HAVE ON EXISTING STOCKHOLDERS?
As a result of the Reverse Stock Split, each ninety (90) shares of our
Pre-Split Common Stock issued and outstanding as of March 31, 2006
shall automatically be reclassified and continued, without any action on the
part of the holder thereof, as one share of common stock, par value $0.001 per
share. We will not issue fractional shares on account of the Reverse Stock
Split. Holders of Pre-Split Common Stock who would otherwise be entitled to a
fraction of a share on account of the Reverse Stock Split shall be entitled to
receive, without any action on the part of the holder thereof, in lieu of such
fractional share, one full share of common stock.
7
The par value and the relative rights and limitations of the common
stock after the Reverse Stock Split will be identical to those of the
Pre-Split Common Stock. However, following the Reverse Stock Split, the
Company will have the ability to issue additional shares of common stock from
time to time without further stockholder approval. Since holders of common
stock have no preemptive rights to purchase or subscribe for any of our
unissued stock, the issuance of additional shares of common stock will reduce
the current stockholders' percentage ownership interest in the total
outstanding shares of common stock.
Our ability to issue additional shares of common stock without further
stockholder approval could have a number of effects on our stockholders
depending upon the exact nature and circumstances of any actual issuances of
authorized but unissued shares. The ability to issue additional shares could
have an anti-takeover effect, in that additional shares could be issued
(within the limits imposed by applicable law) in one or more transactions that
could make a change in control or takeover more difficult. For example,
additional shares could be issued by the Company so as to dilute the stock
ownership or voting rights of persons seeking to obtain control of the
Company, even if the persons seeking to obtain control offer an above-market
premium that is favored by a majority of the independent stockholders.
Similarly, the issuance of additional shares to certain persons allied with
the Company's management could have the effect of making it more difficult to
remove current management by diluting the stock ownership or voting rights of
persons seeking to cause such removal. In addition, the Majority Stockholders
may be able to prevent a takeover by voting their shares of the Company's
common stock. The Board of Directors is not aware of any attempt, or
contemplated attempt, to acquire control of the Company, and this proposal is
not being presented with the intent that it be utilized as a type of
anti-takeover device.
DOES THE COMPANY HAVE PLANS TO ISSUE ADDITIONAL SHARES OF COMMON STOCK?
We acquired 100% of the issued and outstanding shares of iTech on
November 4, 2005 in exchange for 305,000,000 newly issued shares (pre-Reverse
Stock Split) of our common stock and the promise to issue an additional
523,333,333 shares (pre-Reverse Stock Split) of our common stock at such time
as we have available sufficient authorized shares. We plan to issue an
additional 5,814,815 shares of common stock (calculated after giving effect to
the Reverse Stock Split) pursuant to our obligation resulting from our
acquisition of iTech. An aggregate of 5,233,333 of the additional shares will
be beneficially owned by the Majority Stockholders. After giving effect to the
Reverse Stock Split and satisfaction of our outstanding obligation, we will
have issued a total of 9,203,704 shares of our Common Stock in connection with
the acquisition of iTech.
The Company does not have any other plans or arrangements to use
additional shares of common stock for any merger, acquisition or business
combination.
We plan to issue additional shares of common stock pursuant to our
existing secured convertible note financing arrangements.
On August 31, 2004, we entered into a securities purchase agreement with
four accredited investors for the sale of secured convertible notes having an
aggregate principal amount of $700,000, a 10% annual interest rate payable
quarterly, and a term of two years. We also agreed to sell warrants to
purchase up to an aggregate of 700,000 shares of our common stock at $0.45 per
share. We only sold $500,000 principal amount of secured convertible notes
under the 2004 agreement. The investors have agreed to purchase the remaining
$200,000 commitment under the terms of our 2005 securities purchase agreement
with the investors.
8
On November 4, 2005, we entered into an additional securities purchase
agreement with the same accredited investors, for the sale of secured
convertible notes having an aggregate principal amount of $3,000,000, an 8%
annual interest rate (payable quarterly), and a term of three years. We also
agreed to sell warrants to purchase up to an aggregate of 15,000,000 shares of
our common stock at $0.10 per share.
As of February 27, 2006, we had issued under the two securities
purchase agreements:
. $3,075,000 aggregate principal amount of secured convertible notes,
. Warrants to purchase 700,000 shares of our common stock at $0.45 per
shares, and
. Warrants to purchase 12,875,000 shares of our common stock at
$0.10 per share.
The investors are required to purchase an additional $625,000
principal amount of secured convertible notes and warrants to purchase
2,125,000 shares of our common stock at $0.10 per share five days
following the date that a registration statement for the resale of the shares
of common stock issuable upon conversion of the secured convertible notes and
exercise of the warrants is declared effective by the Securities and Exchange
Commission and if other conditions are satisfied, including: (i) the Company's
representations and warranties contained in the 2005 securities purchase
agreement being true and correct in all material respects on the date when
made and as of the date of such purchase; (ii) the Company having performed,
satisfied and complied in all material respects with the covenants, agreements
and conditions required by the 2005 agreement; (iii) there being no
litigation, statute, rule, regulation, executive order, decree, ruling or
injunction that has been enacted, entered, promulgated or endorsed by or in
any court or government authority of competent jurisdiction or any
self-regulatory organization having requisite authority which prohibits the
transactions contemplated by the 2005 agreement; (iv) no event having occurred
which could reasonably be expected to have a material adverse effect on the
Company; and (v) the shares of common stock issuable upon conversion of the
secured convertible notes and exercise of the warrants having been authorized
for quotation on the OTC Bulletin Board and trading in our common stock on the
OTC Bulletin Board having not been suspended by the Securities and Exchange
Commission or the OTC Bulletin Board.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
The proposed re-authorization (together with the reverse stock split
described herein) of 400,000,000 authorized shares of our common stock will
permit the Company to satisfy our existing obligations to issue 235,500,000
shares of our Common Stock (2,616,667 shares after giving effect to the
Reverse Stock Split) to each of David Walters, our Director and Chief
Executive Officer, and Keith Moore, our Director. These obligations were
incurred in connection with the acquisition of iTech in November 2005.
The Reverse Stock Split will also permit Mr. Walters and Mr. Moore to
exercise greater control over corporate transactions and other matters,
including the power to cause or prevent a change of control. Following the
Reverse Split and the satisfaction of our obligation to issue additional
shares incurred in the iTech acquisition, Mr. Walters and Mr. Moore will be
able to vote an aggregate of 8,283,334 shares (or 84.0%) of our outstanding
Common Stock and will be the sole members of our Board of Directors.
Accordingly, they will have the ability to issue common stock from time to
time.
No director has opposed any of these actions.
9
WHAT VOTE IS REQUIRED FOR APPROVAL?
Approval of this proposal requires the affirmative vote of a majority of
the shares of common stock of the Company outstanding as of the Record Date.
David Walters, a Director of the Company and the Company's Chief Executive
Officer, and Keith Moore, a Director of the Company, can vote an aggregate of
274,500,000 shares (or 75.2%) of our outstanding common stock and will be able
to approve this proposal.
IS THE COMPANY ASKING FOR MY PROXY?
Our Board of Directors has unanimously approved the Reverse Stock Split.
Our Majority Stockholders will give their signed written consent to action
without a meeting to the Reverse Stock Split. The Reverse Stock Split will
become effective as of as of March 31, 2006. Therefore, we are not
asking for your proxy, and we request that you do not send a proxy, as no
further shareholder approval is either required or sought.
[Remainder of page left intentionally blank.]
10
PROPOSAL 3
TO APPROVE THE COMPANY'S 2005 STOCK INCENTIVE PLAN
WHAT ARE THE MAJORITY STOCKHOLDERS APPROVING?
The Majority Stockholders will approve our 2005 Stock Incentive Plan
(the "Plan"). The Board of Directors adopted the Plan on December 1, 2005, in
a form substantially similar to the attached "Appendix B", via unanimous
written consent to action without a meeting.
There follows a summary of the material features of the Plan.
WHAT IS THE PURPOSE OF THE PLAN?
The Plan is intended to secure for us the benefits arising from
ownership of our common stock by our employees, officers, directors and
consultants, all of whom are and will be responsible for our future growth.
The Plan is designed to help attract and retain for us personnel of superior
ability for positions of exceptional responsibility, to reward employees,
officers, directors and consultants for their services and to motivate such
individuals through added incentives to further contribute to our success.
WHAT TYPES OF INCENTIVES MAY BE AWARDED UNDER THE PLAN?
Awards under the Plan may be made in the form of (i) incentive stock
options (to our eligible employees only); (ii) nonqualified stock options;
(iii) restricted stock; (iv) stock awards; (v) performance shares; or (vi) any
combination of the foregoing. No incentive stock options may be granted more
than ten years after December 1, 2005.
WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
Only our employees may receive incentive stock options. Any of our
employees, officers, directors and consultants, except for instances where a
consultant's services are in connection with the offer or sale of securities
in a capital-raising transaction, or such services directly or indirectly
promote or maintain a market for our securities, and subject to any other
limitations as may be provided by the Internal Revenue Code of 1986, as
amended (the "Code"), the Securities and Exchange Act of 1934 (the "Exchange
Act"), or our Board of Directors, may receive nonqualified stock options,
restricted stock, stock awards, performance shares or any combination of the
foregoing. In making determinations regarding eligibility to participate in
the Plan, our board of directors may take into account the nature of the
services rendered by such person, his or her present and potential
contribution to our success, and such other factors as our Board of Directors,
in its discretion, shall deem relevant. We currently have thirty-four (34)
employees (including our officers and directors) who are eligible to
participate in the Plan. We use various consultants, the approximate number
of which we cannot determine, who will also be eligible to participate in the
Plan. There are no other eligibility requirements such as length of service
or full-time commitment to be eligible to participate in the Plan.
It is not possible to determine the benefits or amounts that either will
be received by or allocated to any particular person or group of people under
the Plan or would have been received by or allocated to any particular person
or group of people for 2004 if the Plan had been in effect.
11`
WHO WILL ADMINISTER THE PLAN?
Our Board of Directors or a committee appointed by our Board of
Directors will, in its sole discretion, administer the Plan. A committee
appointed by our Board of Directors must consist of not fewer than two members
of the Board of Directors each of whom must qualify (at the time of
appointment to the committee and during all periods of service on the
committee) in all respects as a Non-Employee Director (within the meaning of
Rule 16b-3 under the Exchange Act) and as an Outside Director (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code).
WHAT IS THE AMOUNT AND PER SHARE VALUE OF THE COMMON STOCK SUBJECT TO THE
PLAN?
The maximum aggregate number of shares of our common stock reserved for
issuance under the Plan is 100,000,000 shares (prior to giving effect to the
Reverse Stock Split), all of which are available for incentive stock options.
The market value of our common stock was $0.0041 based on the last
sale price as reported on the over-the-counter Bulletin Board as of
February 24, 2006. We will receive services as consideration for any
equity incentives that we award under the Plan.
HOW WILL THE EXERCISE PRICE AND EXPIRATION DATE OF OPTIONS BE DETERMINED?
Our Board of Directors, in its sole discretion, will determine the
exercise price of any options granted under the Plan. The exercise price of
an incentive stock option cannot be less than (i) 100% of the fair market
value of the common stock on the date of grant or (ii) in the case of an
incentive stock option granted to an individual who owns (or is deemed to own
pursuant to Section 424(d) of the Code), at the time of grant, stock
possessing more than 10% of the total combined voting power of all classes of
our stock (a "10% Stockholder"), 110% of the fair market value of the common
stock on the date of grant. The exercise price of a nonqualified stock option
may be less than 100% of the fair market value of the common stock on the date
of grant; provided, however, that the exercise price of each nonqualified
stock option granted under the Plan cannot in any event be less than the par
value per share of our common stock.
Our Board of Directors, in its sole discretion, will determine the
expiration date of any options granted under the Plan; provided that with
respect to an incentive stock option the expiration date must be within (i)
ten years from the date of grant, or such shorter period as may be specified
by our board of directors, or (ii) in the case of 10% Stockholder, five years
from the date of grant.
WHAT HAPPENS TO OPTIONS UPON TERMINATION OF EMPLOYMENT OR OTHER RELATIONSHIPS?
An incentive stock option will lapse and cease to be exercisable upon an
employee's termination of service within such period following the termination
as shall have been determined by our Board of Directors; provided that such
period shall not exceed the period of time ending on the date three months
following the termination, unless employment was terminated: (i) as a result
of permanent and total disability within the meaning of Section 22(e)(3) of
the Code, in which event such period shall not exceed the period of time
ending on the date twelve months following the termination; or (ii) as a
result of death, or if death shall have occurred following termination (other
than as a result of disability) and during the period that the incentive stock
option was still exercisable, in which event such period may not exceed the
12
period of time ending on the earlier of the date twelve months after the date
of death. Such period following a termination of service or death shall in no
event extend beyond the original period during which the incentive stock
option was originally exercisable. A nonqualified stock option shall lapse
and cease to be exercisable upon a termination of service or within such
period following a termination of service as shall have been determined by our
Board of Directors.
ARE THE STOCK INCENTIVES AWARDED UNDER THE PLAN TRANSFERRABLE?
Options awarded under the Plan generally are not transferable other than
by will or by the laws of descent and distribution, and shall be exercisable
during the lifetime of the recipient only by the recipient or the recipient's
guardian or legal representative. In the event of the death of a recipient,
any unexercised options may be exercised by the executor or personal
representative of such recipient 's estate or by any person who acquired the
right to exercise such options by bequest under the recipient's will or by
inheritance.
Our Board of Directors, in its sole discretion, may at any time permit a
recipient to transfer a nonqualified stock option for no consideration to or
for the benefit of one or more members of the recipient 's Immediate Family
(including, without limitation, to a trust for the benefit of the recipient
and/or one or more members of such recipient 's Immediate Family or a
corporation, partnership or limited liability company established and
controlled by the recipient and/or one or more members of such recipient 's
Immediate Family), subject to such limits as our board of directors may
establish. For purposes of the Plan, the term "Immediate Family" means any
child, stepchild, grandchild, parent, stepparent, grandparent, spouse,
sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law,
brother-in-law or sister-in-law and includes adoptive relationships.
WHAT EQUTABLE ADJUSTMENTS WILL BE MADE IN THE EVENT OF CERTAIN CHANGES IN OUR
COMMON STOCK?
Our Board of Directors may appropriately adjust the total amount of
shares with respect to which equity incentives are granted under the Plan and
rights of outstanding grants (both as to the number of shares subject to the
outstanding grants and the option price(s) or other purchase price(s) of such
shares, as applicable) for any increase or decrease in the number of
outstanding shares of our common stock resulting from payment of a stock
dividend on our common stock, a stock split or subdivision or combination of
shares of our common stock, or a reorganization or reclassification of our
common stock, or any other change in the structure of shares of our common
stock. Such adjustments and the manner of application of the foregoing
provisions will be determined by our Board of Directors in its sole
discretion. All adjustments made in respect of each incentive stock option
shall be made so that such incentive stock option will continue to be an
incentive stock option, as defined in Section 422 of the Code.
WHAT WILL HAPPEN IN THE EVENT OF A CHANGE OF CONTROL, DISSOLUTION OR
LIQUIDATION?
Upon a change of control which includes us adopting a plan of merger or
consolidation with any other corporation or association as a result of which
the holders of our voting capital stock as a group would receive less than 50%
of the voting capital stock of the surviving or resulting corporation,
approving an agreement providing for the sale or transfer (other than as
13
security for our obligations) of substantially all our assets, or, in the
absence of a prior expression of approval by our board of directors,
upon any person (other than a person, or group including a person, who
beneficially owns more than 5.0% of our voting capital stock) acquiring more
than 20% of our voting capital stock, as provided in the Plan, all outstanding
stock options will become immediately exercisable in full, all outstanding
performance shares will be paid out as soon as practicable, and all
outstanding shares of restricted stock with respect to which the restrictions
have not lapsed will be deemed vested. Our Board of Directors is authorized
to take such action as it determines to be necessary or advisable, and fair
and equitable to recipients and to us, with respect to an outstanding equity
incentive awarded under the Plan in the event of a change of control or other
similar event. Such action may include, but shall not be limited to,
establishing, amending or waiving the form, terms, conditions and duration of
such equity incentive, so as to provide for earlier, later, extended or
additional times for exercise or payments, differing methods for calculating
payments, alternate forms and amounts of payment, an accelerated release of
restrictions or other modifications. Our Board of Directors may take such
actions by adopting rules and regulations of general applicability to all
recipients or to certain categories of recipients, by including, amending or
waiving terms and conditions in an equity incentive, or by taking action with
respect to individual recipients from time to time.
Upon our dissolution or liquidation, each equity incentive granted under
the Plan and then outstanding will terminate; provided, however, that
following the adoption of a plan of dissolution or liquidation, and in any
event prior to the effective date of such dissolution or liquidation, each
such outstanding equity incentive granted under the Plan will be exercisable
in full and all restrictions shall lapse as provided in the Plan.
MAY THE PLAN BE MODIFIED, AMENDED OR TERMINATED?
Our Board of Directors at any time and from time to time may amend or
terminate the Plan as may be necessary or desirable to implement or
discontinue the Plan or any provision thereof. To the extent required by the
Exchange Act or the Code, however, no amendment, without approval by our
stockholders, shall: (a) materially alter the group of persons eligible to
participate in the Plan; (b) change the maximum aggregate number of shares of
common stock that are available for issuance under the Plan; (c) alter the
class of individuals eligible to receive an incentive stock option, increase
the limit on value of shares first exercisable during with respect to any
incentive stock option, or the value of shares of common stock for which an
employee may be granted an incentive stock option.
Our Board of Directors or our stockholders may not amend or discontinue
the Plan or any provision of the Plan so as to adversely affect (in the sole
discretion of our Board of Directors) any equity incentive awarded under the
Plan without the written consent of the recipient of such award; provided,
however, that our Board of Directors retains the right and power to: (a) annul
the grant of any equity incentive if the recipient is terminated for cause as
determined by our Board of Directors; and (b) convert any outstanding
incentive stock option to a nonqualified stock option.
WHAT ARE THE FEDERAL INCOME TAX CONSEQUENCES RELATED TO AWARDS UNDER THE PLAN?
The following paragraphs are a summary of the general federal income tax
consequences to U.S. taxpayers and the Company of awards granted under the
Plan. Tax consequences for any particular individual may be different. The
14
participant must pay any taxes we are required to withhold at the time of the
exercise or settlement.
Incentive Stock Options. No taxable income is recognized on grant of an
incentive stock option or on its exercise (unless the participant is subject
to the alternative minimum tax ("AMT"). If the participant holds the stock
acquired upon exercise of an incentive stock option (the "ISO Shares") for
more than one year after the date the option was exercised and for more than
two years after the date the option was granted, the participant generally
will realize capital gain or loss (rather than ordinary income or loss) upon
disposition of the ISO Shares. This gain or loss will be equal to the
difference between the amount realized upon such disposition and the amount
paid for the ISO Shares.
If the participant disposes of ISO Shares prior to the expiration of
either required holding period described above (a "disqualifying
disposition"), the gain realized upon such disposition, up to the difference
between the fair market value of the ISO Shares on the date of exercise (or,
if less, the amount realized on a sale of such shares) and the option exercise
price, will be treated as ordinary income. Any additional gain will be
long-term or short-term capital gain, depending upon the amount of time the
ISO Shares were held by the participant.
Alternative Minimum Tax. The difference between the fair market value of
the ISO Shares on the date of exercise and the exercise price is an adjustment
to income for purposes of the AMT. The AMT (imposed to the extent it exceeds
the taxpayer's regular tax) is 26% of an individual taxpayer's alternative
minimum taxable income (28% in the case of alternative minimum taxable income
in excess of $175,000). Alternative minimum taxable income is determined by
adjusting regular taxable income for certain items, increasing that income by
certain tax preference items (including the difference between the fair market
value of the ISO Shares on the date of exercise and the exercise price) and
reducing this amount by the applicable exemption amount ($58,000 in case of a
joint return, and $40,250 in the case of an unmarried person, subject to
reduction under certain circumstances). If a disqualifying disposition of the
ISO Shares occurs in the same calendar year as exercise of the incentive stock
option, there is no AMT adjustment with respect to those ISO Shares. Also,
upon a sale of ISO Shares that is not a disqualifying disposition, alternative
minimum taxable income is reduced in the year of sale by the excess of the
fair market value of the ISO Shares at exercise over the amount paid for the
ISO Shares.
Nonstatutory Stock Options. No taxable income is reportable when a
nonstatutory stock option is granted to a participant. Upon exercise, the
participant will recognize ordinary income in an amount equal to the excess of
the fair market value (on the exercise date) of the shares purchased over the
exercise price of the option. Any additional gain or loss recognized upon any
later disposition of the shares would be capital gain or loss.
Restricted Stock. A participant will not have taxable income upon grant
unless he or she elects under Section 83(b) of the Code to be taxed at that
time. Instead, he or she will recognize ordinary income at the time of vesting
equal to the fair market value (on the vesting date) of the shares received
minus any amount paid for the shares.
Tax Effect on the Company. We generally will be entitled to a tax
deduction in connection with an award under the Plan in an amount equal to the
ordinary income realized by a participant and at the time the participant
15
recognizes such income (for example, the exercise of a nonstatutory stock
option). Special rules limit the deductibility of compensation paid to our
Chief Executive Officer and to each of our four other most highly compensated
executive officers. Under Section 162(m) of the Code, the annual compensation
paid to any of these specified executives will be deductible only to the
extent that it does not exceed $1,000,000. However, we can preserve the
deductibility of certain compensation in excess of $1,000,000 if the
conditions of Section 162(m) are met. These conditions include stockholder
approval of the Plan, setting limits on the number of shares subject to awards
that any individual may receive in a calendar year, and for awards other than
certain stock options, establishing performance criteria that must be met
before the award actually will vest or be paid. The Plan has been designed to
permit our Board of Directors to grant awards that qualify as
performance-based for purposes of satisfying the conditions of Section 162(m),
thereby permitting us to continue to receive a federal income tax deduction in
connection with such awards.
INTEREST OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
David Walters, our Director and Chief Executive Officer, and Keith
Moore, our Director, are both eligible to participate in the Plan. Approval
of the Plan therefore may result in Mr. Walters and Mr. Moore obtaining
additional ownership in and control of the Company.
No director has opposed any of these actions.
WHAT VOTE IS REQUIRED FOR APPROVAL?
Approval of this proposal requires the affirmative vote of a majority of
the shares of common stock of the Company outstanding as of the Record Date.
David Walters, a Director of the Company and the Company's Chief Executive
Officer, and Keith Moore, a Director of the Company, can vote an aggregate of
274,500,000 shares (or 75.2%) of our outstanding common stock and will be able
to approve this proposal.
IS THE COMPANY ASKING FOR MY PROXY?
Our Board of Directors has unanimously approved our 2005 Stock Incentive
Plan. Our Majority Stockholders will give their signed written consent to
action without a meeting to approve our 2005 Stock Incentive Plan. Therefore,
we are not asking for your proxy, and we request that you do not send a proxy,
as no further shareholder approval is either required or sought.
[Remainder of page left intentionally blank.]
16
Executive Compensation
- ----------------------
SUMMARY COMPENSATION TABLE(1)
Annual Compensation
------------------------------------------------------------------------
Name & Principal Salary Bonus Other Annual
Position Year ($) ($) Compensation
------------------------ ------ ----------- ----------- ------------
David Walters,(2) 2005 $ 85,000 $ - $ -
CEO, President,
Treasurer and Director
MacDonald S. Tudeme,(3) 2005 $ - $ - $ 10,800(4)
CEO, President, 2004 $ 66,344 $ - $ 10,800(4)
Treasurer and Director 2003 $ 8,654 $ - $ 10,800(4)
-------------------------------------------------------------------------
(1) Does not include perquisites and other personal benefits in amounts
less an 10% of the total annual salary and other compensation.
(2) David Walters became CEO, President and Treasurer of the Company
effective December 15, 2005. He had served as Executive Vice President
of the Company from November 4, 2005 to December 15, 2005. He has been
a Director of the Company since November 4, 2005.
(3) Macdonald S. Tudeme resigned from his position as CEO, President,
Treasurer and Director of the Company effective December 15, 2005.
(4) MacDonald S. Tudeme received a vehicle allowance of $10,800 during the
fiscal year ended December 31, 2005, a vehicle allowance of $10,800
during the fiscal year ended December 31, 2004 and $10,800 during the
fiscal year ended December 31, 2003.
Security Ownership of Management and Certain Security Holders
- --------------------------------------------------------------
The following table sets forth information as of February 27, 2006,
with respect to the beneficial ownership of the Common Stock by (i) each
director and officer of the Company, (ii) all directors and officers as a
group and (iii) each person known by the Company to own beneficially 5% or
more of the Common Stock:
Shares of Common Stock Beneficially Owned(1)
- ------------------------------------------------------------------------------
Name and Address
Of Beneficial Owners Number Percent
- ------------------------------- ----------------------------- --------------
David Walters 137,250,000(2) 37.6%
18301 Von Karman, Suite 250
Irvine, CA 92612
Keith Moore 137,250,000(3) 37.6%
18301 Von Karman, Suite 250
Irvine, CA 92612
Nite Capital, LP 30,500,000(4) 8.4%
100 East Cook Ave., Suite 201
Libertyville, IL 60048
- ------------------------------
All officers and directors 274,500,000(2)(3) 75.2%
as a group (4 people)
* Less than 1%.
17
(1) The number of shares of common stock owned are those "beneficially
owned" as determined under the rules of the Securities and Exchange
Commission, including any shares of common stock as to which a person
has sole or shared voting or investment power and any shares of common
stock which the person has the right to acquire within 60 days through
the exercise of any option, warrant or right. Shares of common stock
subject to a convertible note or warrant currently convertible or
exercisable, or convertible or exercisable within 60 days are deemed
outstanding for computing the percentage of the person holding such
convertible note or warrant, but are not deemed outstanding for
computing the percentage of any other person. As of the Record Date
there were 364,909,120 shares of common stock outstanding and an
agreement to issue an additional 523,333,333 shares of common stock in
connection with the Company's acquisition of iTech. All share numbers
do not reflect the effect of the Company's proposed one-for-ninety
reverse stock split.
(2) This number includes 137,250,000 shares issued to Mr. Walters in
connection with the Company's acquisition of iTech, but does not reflect
an additional 235,500,000 shares which will be issued to Mr. Walters at
such time as the Company has available authorized shares. The Company
will have available authorized shares to meet its obligation to Mr.
Walters upon completion of the Reverse Stock Split. Mr. Walters
beneficially owns his shares through Monarch Bay Capital Group, LLC, of
which he is the sole member.
(3) This number includes 137,250,000 shares issued to Mr. Moore in
connection with the Company's acquisition of iTech, but does not reflect
an additional 235,500,000 shares which will be issued to Mr. Moore upon
such time as the Company has available authorized shares. The Company
will have available authorized shares to meet its obligation to Mr. Moore
upon completion of the Reverse Stock Split. Mr. Moore beneficially owns
his shares through MEL Enterprises, Ltd.
(4) This number includes 30,500,000 shares issued to Nite Capital, LP in
connection with the Company's acquisition of iTech, but does not reflect
an additional 52,333,333 shares which will be issued to Nite Capital, LP
upon such time as the Company has available authorized shares. The
Company will have available authorized shares to meet its obligation to
Nite Capital, LP upon completion of the Reverse Stock Split. The general
partner of Nite Capital, LP is Nite Capital LLC, a Delaware limited
liability company. Mr. Keith Goodman, a managing partner of Nite Capital
LLC, has voting and investment control with respect to the shares of
Common Stock beneficially owned by Nite Capital LP.
Company Contact Information
- ---------------------------
All inquires regarding our Company should be addressed to our Company's
principal executive office:
MT ULTIMATE HEALTHCARE CORP.
18301 Von Karman, Suite 250
Irvine, CA 92612
Attention: David Walters, Chief Executive Officer
BY ORDER OF THE BOARD OF DIRECTORS
/s/ David Walters
- --------------------------------------
David Walters, Chief Executive Officer
Dated March 6, 2006
18
Appendix A
Certificate of Amendment to Articles of Incorporation
-----------------------------------------------------
For Nevada Profit Corporations
------------------------------
(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)
1. Name of corporation: MT ULTIMATE HEALTHCARE CORP.
2. The articles have been amended as follows (provide article numbers, if
available):
ARTICLE 1. NAME
The name of the corporation is MONARCH STAFFING, INC.
ARTICLE 4. NUMBER OF SHARES THE CORPORATION IS AUTHORIZED TO ISSUE
Following completion of the Corporation's one-for-ninety reverse stock split,
the amount of the total authorized capital stock of the corporation shall be
405,000,000 of which: (a) 400,000,000 shares are designated Common Stock, par
value $0.001 per share and (b) 5,000,000 shares are designated Preferred
Stock, par value $0.001 per share. The Preferred Stock, or any series
thereof, shall have such designations, preferences and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions thereof as shall be expressed in the resolution or
resolutions providing for the issue of such stock adopted by the board of
directors and may be made dependent upon facts ascertainable outside such
resolution or resolutions of the board of directors, provided that the matter
in which such facts shall operate upon such designations, preferences,
rights and qualifications; limitations or restrictions of such class or
series of stock is clearly and expressly set forth in the resolution or
resolutions providing for the issuance of such stock by the board of
directors.
At the effective date of this amendment to the Articles of Incorporation, each
ninety shares of Common Stock, par value $0.001, outstanding shall
automatically be combined into one share of Common Stock, par value $0.001 per
share. No fractional shares of Common Stock shall be issued upon such
combination, but in lieu thereof, the Corporation shall round up the number of
shares to be issued to any holder of a fractional share and issue one whole
share for each fractional interest.
3. The vote by which the stockholders holding shares in the corporation
entitling them to exercise at least a majority of the voting power, or such
greater proportion of the voting power as may be required in the case of a
vote by classes or series, or as may be required by the provisions of the
articles of incorporation have voted in favor of the amendment is:
4. Effective date of filing (optional):
5. Officer Signature:
19
Appendix B
MT ULTIMATE HEALTHCARE CORP.
2005 STOCK INCENTIVE PLAN
ARTICLE I -- PREAMBLE
1.1 This MT Ultimate Healthcare Corp. 2005 Stock Incentive Plan of is
intended to secure for the Company and its Affiliates the benefits arising
from ownership of the Company's Common Stock by the Employees, Officers,
Directors and Consultants of the Company and its Affiliates, all of whom are
and will be responsible for the Company's future growth. The Plan is designed
to help attract and retain for the Company and its Affiliates personnel of
superior ability for positions of exceptional responsibility, to reward
Employees, Officers, Directors and Consultants for their services and to
motivate such individuals through added incentives to further contribute to
the success of the Company and its Affiliates. With respect to persons subject
to Section 16 of the Act, transactions under this Plan are intended to satisfy
the requirements of Rule 16b-3 of the Act.
1.2 Awards under the Plan may be made to an Eligible Person in the form
of (i) Incentive Stock Options (to Eligible Employees only); (ii) Nonqualified
Stock Options; (iii) Restricted Stock; (iv) Stock Awards; (v) Performance
Shares; or (vi) any combination of the foregoing.
1.3 The Company's board of directors adopted the Plan on December 1,
2005. The Plan shall be effective December 1, 2005 (the "Effective Date"),
subject to approval by the shareholders of the Company to the extent necessary
to satisfy the requirements of the Code, the Act, or other applicable federal
or state law. Unless sooner terminated as provided elsewhere in this Plan,
this Plan shall terminate upon the close of business on the day next preceding
the tenth (10th) anniversary of the Effective Date. Award Agreements
outstanding on such date shall continue to have force and effect in accordance
with the provisions thereof.
1.4 The Plan shall be governed by, and construed in accordance with,
the laws of the State of Nevada (except its choice-of-law provisions).
1.5 Capitalized terms shall have the meaning provided in Article II
unless otherwise provided in this Plan or any related Award Agreement.
ARTICLE II -- DEFINITIONS
DEFINITIONS. Except where the context otherwise indicates, the
following definitions apply:
2.1 "Act" means the Securities Exchange Act of 1934, as now in effect
or as hereafter amended.
2.2 "Affiliate" means any parent corporation or subsidiary corporation
of the Company, whether now or hereinafter existing, as those terms are
defined in Sections 424(e) and (f), respectively, of the Code.
2.3 "Award" means an award granted to a Participant in accordance with
the provisions of the Plan, including, but not limited to, Stock Options,
Restricted Stock, Stock Awards, Performance Shares, or any combination of the
foregoing.
20
2.4 "Award Agreement" means the separate written agreement evidencing
each Award granted to a Participant under the Plan.
2.5 "Board of Directors" or "Board" means the Board of Directors of the
Company, as constituted from time to time.
2.7 "Change of Control" means (i) the adoption of a plan of merger or
consolidation of the Company with any other corporation or association as a
result of which the holders of the voting capital stock of the Company as a
group would receive less than 50% of the voting capital stock of the surviving
or resulting corporation; (ii) the approval by the Board of Directors of an
agreement providing for the sale or transfer (other than as security for
obligations of the Company) of substantially all the assets of the Company; or
(iii) in the absence of a prior expression of approval by the Board of
Directors, the acquisition of more than 20% of the Company's voting capital
stock by any person within the meaning of Rule 13d-3 under the Act (other than
the Company or a person that directly or indirectly controls, is controlled
by, or is under common control with, the Company).
2.8 "Code" means the Internal Revenue Code of 1986, as amended, and the
regulations and interpretations promulgated thereunder.
2.9 "Committee" means a committee of two or more members of the Board
appointed by the Board in accordance with Section 3.2 of the Plan.
2.10 "Common Stock" means the Company's common stock.
2.11 "Company" means MT Ultimate Healthcare Corp., a Nevada
corporation.
2.12. "Consultant" means any person, including an advisor engaged by
the Company or an Affiliate to render bona fide consulting or advisory
services to the Company or an Affiliate, other than as an Employee, Director
or Non-Employee Director.
2.13 "Director" means a member of the Board of Directors of the
Company.
2.14 "Disability" means the permanent and total disability of a person
within the meaning of Section 22(e)(3) of the Code.
2.15 "Effective Date" shall be the date set forth in Section 1.3 of the
Plan.
2.16 "Eligible Employee" means an Eligible Person who is an Employee of
the Company or any Affiliate.
2.17 "Eligible Person" means any Employee, Officer, Director,
Non-Employee Director or Consultant of the Company or any Affiliate, except
for instances where services are in connection with the offer or sale of
securities in a capital-raising transaction, or they directly or indirectly
promote or maintain a market for the Company's securities, subject to any
other limitations as may be provided by the Code, the Act, or the Board. In
making such determinations, the Board may take into account the nature of the
services rendered by such person, his or her present and potential
contribution to the Company's success, and such other factors as the Board in
its discretion shall deem relevant.
2.19 "Employee" means an individual who is a common-law employee of the
Company or an Affiliate including employment as an Officer. Mere service as a
Director or payment of a director's fee by the Company or an Affiliate shall
not be sufficient to constitute "employment" by the Company or an Affiliate.
21
2.20 "ERISA" means the Employee Retirement Income Security Act of 1974,
as now in effect or as hereafter amended.
2.21 "Fair Market Value" means:
(a) for purposes of an Incentive Stock Option, if there is a
market for the Company's stock, on a stock exchange or in an over-the-counter
market, or otherwise, the Fair Market Value shall be the mean between the
highest and lowest quoted selling prices on the valuation date of the
Incentive Stock Option, or if there were no sales of the Company's Common
Stock on the valuation date, the Fair Market Value shall be the weighted
average of the means between the highest and lowest sales on the nearest date
before and the nearest date after the valuation date. If a valuation pursuant
to this paragraph is not available, the appropriate method described in
Section 20.2031-2 of the Treasury Regulations adopted under the Code shall be
used for the Fair Market Value, and
(b) for all other purposes, the mean between the highest and
lowest quoted selling prices of the Common Stock (if actual sales price
information on such trading day is not available, the mean between the bona
fide bid and asked prices on such trading day shall be used) on the trading
day immediately prior to the date on which a determination is being made
pursuant to this Section 2.21 (the "Mean Selling Price"), as reported by the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), or if the Common Stock is not traded on NASDAQ, the Mean Selling
Price in the over-the-counter market; provided, however, that if the Common
Stock is listed on a stock exchange, the Fair Market Value shall be the Mean
Selling Price on such exchange; and, provided further, that if the Common
Stock is not quoted or listed by any organization, the fair value of the
Common Stock, as determined by the Board, whose determination shall be
conclusive, shall be used. In no event shall the Fair Market Value of any
share of Common Stock be less than its par value.
2.22 "Grant Date" means, as to any Award, the latest of:
(a) the date on which the Board authorizes the grant of the Award;
or
(b) the date the Participant receiving the Award becomes an
Employee or a Director of the Company or its Affiliate, to the extent
employment status is a condition of the grant or a requirement of the Code or
the Act; or
(c) such other date (later than the dates described in (a) and (b)
above) as the Board may designate and as set forth in the Participant's Award
Agreement.
2.23 "Immediate Family" means any child, stepchild, grandchild, parent,
stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law,
son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include
adoptive relationships.
2.24 "Incentive Stock Option" means a Stock Option intended to qualify
as an incentive stock option within the meaning of Section 422 of the Code and
is granted under Article IV of the Plan and designated as an Incentive Stock
Option in a Participant's Award Agreement.
2.25 "Non-Employee Director" shall have the meaning set forth in Rule
16b-3 under the Act.
2.26 "Nonqualified Stock Option" means a Stock Option not intended to
qualify as an Incentive Stock Option and is not so designated in the
Participant's Award Agreement.
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2.27 "Officer" means a person who is an officer of the Company within
the meaning of Section 16 of the Act.
2.28 "Option Period" means the period during which a Stock Option may
be exercised from time to time, as established by the Board and set forth in
the Award Agreement for each Participant who is granted a Stock Option.
2.29 "Option Price" means the purchase price for a share of Common
Stock subject to purchase pursuant to a Stock Option, as established by the
Board and set forth in the Award Agreement for each Participant who is granted
a Stock Option.
2.30 "Outside Director" means a Director who either (i) is not a
current employee of the Company or an "affiliated corporation" (within the
meaning of Treasury Regulations promulgated under Section 162(m) of the Code),
is not a former employee of the Company or an "affiliated corporation"
receiving compensation for prior services (other than benefits under a tax
qualified pension plan), was not an officer of the Company or an "affiliated
corporation" at any time and is not currently receiving direct or indirect
remuneration from the Company or an "affiliated corporation" for services in
any capacity other than as a Director or (ii) is otherwise considered an
"outside director" for purposes of Section 162(m) of the Code.
2.31 "Participant" means an Eligible Person to whom an Award has been
granted and who has entered into an Award Agreement evidencing the Award or,
if applicable, such other person who holds an outstanding Award.
2.32 "Performance Objectives" shall have the meaning set forth in
Article IX of the Plan.
2.33 "Performance Period" shall have the meaning set forth in Article
IX of the Plan.
2.34 "Performance Share" means an Award under Article IX of the Plan of
a unit valued by reference to the Common Stock, the payout of which is subject
to achievement of such Performance Objectives, measured during one or more
Performance Periods, as the Board, in its sole discretion, shall establish at
the time of such Award and set forth in a Participant's Award Agreement.
2.35 "Plan" means this MT Ultimate Healthcare Corp. 2005 Stock
Incentive Plan, as it may be amended from time to time.
2.36 "Reporting Person" means a person required to file reports under
Section 16(a) of the Act.
2.37 "Restricted Stock" means an Award under Article VII of the Plan of
shares of Common Stock that are at the time of the Award subject to
restrictions or limitations as to the Participant's ability to sell, transfer,
pledge or assign such shares, which restrictions or limitations may lapse
separately or in combination at such time or times, in installments or
otherwise, as the Board, in its sole discretion, shall determine at the time
of such Award and set forth in a Participant's Award Agreement.
2.38 "Restriction Period" means the period commencing on the Grant Date
with respect to such shares of Restricted Stock and ending on such date as the
Board, in its sole discretion, shall establish and set forth in a
Participant's Award Agreement.
2.39 "Retirement" means retirement as determined under procedures
established by the Board or in any Award, as set forth in a Participant's
Award Agreement.
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2.40 "Rule 16b-3" means Rule 16b-3 promulgated under the Act or any
successor to Rule 16b-3, as in effect from time to time. Those provisions of
the Plan which make express reference to Rule 16b-3, or which are required in
order for certain option transactions to qualify for exemption under Rule
16b-3, shall apply only to a Reporting Person.
2.41 "Stock Award" means an Award of shares of Common Stock under
Article VIII of the Plan.
2.42 "Stock Option" means an Award under Article IV or Article V of the
Plan of an option to purchase Common Stock. A Stock Option may be either an
Incentive Stock Option or a Nonqualified Stock Option.
2.43 "Ten Percent Stockholder" means an individual who owns (or is
deemed to own pursuant to Section 424(d) of the Code), at the time of grant,
stock possessing more than ten percent (10%) of the total combined voting
power of all classes of stock of the Company or any of its Affiliates.
2.44 "Termination of Service" means (i) in the case of an Eligible
Employee, the discontinuance of employment of such Participant with the
Company or its Affiliates for any reason other than a transfer to another
member of the group consisting of the Company and its Affiliates and (ii) in
the case of a Director who is not an Employee of the Company or any Affiliate,
the date such Participant ceases to serve as a Director. The determination of
whether a Participant has discontinued service shall be made by the Board in
its sole discretion. In determining whether a Termination of Service has
occurred, the Board may provide that service as a Consultant or service with a
business enterprise in which the Company has a significant ownership interest
shall be treated as employment with the Company.
ARTICLE III - ADMINISTRATION
3.1 The Plan shall be administered by the Board of Directors of the
Company. The Board shall have the exclusive right to interpret and construe
the Plan, to select the Eligible Persons who shall receive an Award, and to
act in all matters pertaining to the grant of an Award and the determination
and interpretation of the provisions of the related Award Agreement,
including, without limitation, the determination of the number of shares
subject to Stock Options and the Option Period(s) and Option Price(s) thereof,
the number of shares of Restricted Stock or shares subject to Stock Awards or
Performance Shares subject to an Award, the vesting periods (if any) and the
form, terms, conditions and duration of each Award, and any amendment thereof
consistent with the provisions of the Plan. The Board may adopt, establish,
amend and rescind such rules, regulations and procedures as it may deem
appropriate for the proper administration of the Plan, make all other
determinations which are, in the Board's judgment, necessary or desirable for
the proper administration of the Plan, amend the Plan or a Stock Award as
provided in Article XI, and terminate or suspend the Plan as provided in
Article XI. All acts, determinations and decisions of the Board made or taken
pursuant to the Plan or with respect to any questions arising in connection
with the administration and interpretation of the Plan or any Award Agreement,
including the severability of any and all of the provisions thereof, shall be
conclusive, final and binding upon all persons.
3.2 The Board may, to the full extent permitted by and consistent with
applicable law and the Company's Bylaws, and subject to Subparagraph 3.2(b)
hereinbelow, delegate any or all of its powers with respect to the
administration of the Plan to a Committee consisting of not fewer than two
members of the Board each of whom shall qualify (at the time of appointment to
the Committee and during all periods of service on the Committee) in all
respects as a Non-Employee Director and as an Outside Director.
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(a) If administration is delegated to a Committee, the Committee
shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, including the power to delegate to a
subcommittee any of the administrative powers the Committee is authorized to
exercise (and references in the Plan to the Board shall thereafter be to the
Committee or subcommittee), subject, however, to such resolutions, not
consistent with the provisions of the Plan, as may be adopted from time to
time by the Board.
(b) The Board may abolish the Committee at any time and reassume
all powers and authority previously delegated to the Committee.
(c) In addition to, and not in limitation of, the right of any
Committee so designated by the Board to administer this Plan to grant Awards
to Eligible Persons under this Plan, the full Board of Directors may from time
to time grant Awards to Eligible Persons pursuant to the terms and conditions
of this Plan, subject to the requirements of the Code, Rule 16b-3 under the
Act or any other applicable law, rule or regulation. In connection with any
such grants, the Board of Directors shall have all of the power and authority
of the Committee to determine the Eligible Persons to whom such Awards shall
be granted and the other terms and conditions of such Awards.
3.3 Without limiting the provisions of this Article III, and subject to
the provisions of Article X, the Board is authorized to take such action as it
determines to be necessary or advisable, and fair and equitable to
Participants and to the Company, with respect to an outstanding Award in the
event of a Change of Control as described in Article X or other similar event.
Such action may include, but shall not be limited to, establishing, amending
or waiving the form, terms, conditions and duration of an Award and the
related Award Agreement, so as to provide for earlier, later, extended or
additional times for exercise or payments, differing methods for calculating
payments, alternate forms and amounts of payment, an accelerated release of
restrictions or other modifications. The Board may take such actions pursuant
to this Section 3.3 by adopting rules and regulations of general applicability
to all Participants or to certain categories of Participants, by including,
amending or waiving terms and conditions in an Award and the related Award
Agreement, or by taking action with respect to individual Participants from
time to time.
3.4 Subject to the provisions of Section 3.9, the maximum aggregate
number of shares of Common Stock which may be issued pursuant to Awards under
the Plan shall be One Hundred Million (100,000,000) shares. Such shares of
Common Stock shall be made available from authorized and unissued shares of
the Company.
(a) For all purposes under the Plan, each Performance Share
awarded shall be counted as one share of Common Stock subject to an Award.
(b) If, for any reason, any shares of Common Stock (including
shares of Common Stock subject to Performance Shares) that have been awarded
or are subject to issuance or purchase pursuant to Awards outstanding under
the Plan are not delivered or purchased, or are reacquired by the Company, for
any reason, including but not limited to a forfeiture of Restricted Stock or
failure to earn Performance Shares or the termination, expiration or
cancellation of a Stock Option, or any other termination of an Award without
payment being made in the form of shares of Common Stock (whether or not
Restricted Stock), such shares of Common Stock shall not be charged against
the aggregate number of shares of Common Stock available for Award under the
Plan and shall again be available for Awards under the Plan. In no event,
however, may Common Stock that is surrendered or withheld to pay the exercise
price of a Stock Option or to satisfy tax withholding requirements be
available for future grants under the Plan.
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(c) The foregoing subsections (a) and (b) of this Section 3.4
shall be subject to any limitations provided by the Code or by Rule 16b-3
under the Act or by any other applicable law, rule or regulation.
3.5 Each Award granted under the Plan shall be evidenced by a written
Award Agreement, which shall be subject to and shall incorporate (by reference
or otherwise) the applicable terms and conditions of the Plan and shall
include any other terms and conditions (not inconsistent with the Plan)
required by the Board.
3.6 The Company shall not be required to issue or deliver any
certificates for shares of Common Stock under the Plan prior to:
(a) any required approval of the Plan by the shareholders of the
Company; and
(b) the completion of any registration or qualification of such
shares of Common Stock under any federal or state law, or any ruling or
regulation of any governmental body that the Company shall, in its sole
discretion, determine to be necessary or advisable.
3.7 The Board may require any Participant acquiring shares of Common
Stock pursuant to any Award under the Plan to represent to and agree with the
Company in writing that such person is acquiring the shares of Common Stock
for investment purposes and without a view to resale or distribution thereof.
Shares of Common Stock issued and delivered under the Plan shall also be
subject to such stop-transfer orders and other restrictions as the Board may
deem advisable under the rules, regulations and other requirements of the
Securities and Exchange Commission, any stock exchange upon which the Common
Stock is then listed and any applicable federal or state laws, and the Board
may cause a legend or legends to be placed on the certificate or certificates
representing any such shares to make appropriate reference to any such
restrictions. In making such determination, the Board may rely upon an opinion
of counsel for the Company.
3.8 Except as otherwise expressly provided in the Plan or in an Award
Agreement with respect to an Award, no Participant shall have any right as a
shareholder of the Company with respect to any shares of Common Stock subject
to such Participant's Award except to the extent that, and until, one or more
certificates representing such shares of Common Stock shall have been
delivered to the Participant. No shares shall be required to be issued, and no
certificates shall be required to be delivered, under the Plan unless and
until all of the terms and conditions applicable to such Award shall have, in
the sole discretion of the Board, been satisfied in full and any restrictions
shall have lapsed in full, and unless and until all of the requirements of law
and of all regulatory bodies having jurisdiction over the offer and sale, or
issuance and delivery, of the shares shall have been fully complied with.
3.9 The total amount of shares with respect to which Awards may be
granted under the Plan and rights of outstanding Awards (both as to the number
of shares subject to the outstanding Awards and the Option Price(s) or other
purchase price(s) of such shares, as applicable) shall be appropriately
adjusted for any increase or decrease in the number of outstanding shares of
Common Stock of the Company resulting from payment of a stock dividend on the
Common Stock, a stock split or subdivision or combination of shares of the
Common Stock, or a reorganization or reclassification of the Common Stock, or
any other change in the structure of shares of the Common Stock. The foregoing
adjustments and the manner of application of the foregoing provisions shall be
determined by the Board in its sole discretion. Any such adjustment may
provide for the elimination of any fractional shares which might otherwise
become subject to an Award. All adjustments made as the result of the
foregoing in respect of each Incentive Stock Option shall be made so that such
Incentive Stock Option shall continue to be an Incentive Stock Option, as
defined in Section 422 of the Code.
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3.10 No director or person acting pursuant to authority delegated by
the Board shall be liable for any action or determination under the Plan made
in good faith. The members of the Board shall be entitled to indemnification
by the Company in the manner and to the extent set forth in the Company's
Articles of Incorporation, as amended, Bylaws or as otherwise provided from
time to time regarding indemnification of Directors.
3.11 The Board shall be authorized to make adjustments in any
performance based criteria or in the other terms and conditions of outstanding
Awards in recognition of unusual or nonrecurring events affecting the Company
(or any Affiliate, if applicable) or its financial statements or changes in
applicable laws, regulations or accounting principles. The Board may correct
any defect, supply any omission or reconcile any inconsistency in the Plan or
any Award Agreement in the manner and to the extent it shall deem necessary or
desirable to reflect any such adjustment. In the event the Company (or any
Affiliate, if applicable) shall assume outstanding employee benefit awards or
the right or obligation to make future such awards in connection with the
acquisition of another corporation or business entity, the Board may, in its
sole discretion, make such adjustments in the terms of outstanding Awards
under the Plan as it shall deem appropriate.
3.12 Subject to the express provisions of the Plan, the Board shall
have full power and authority to determine whether, to what extent and under
what circumstances any outstanding Award shall be terminated, canceled,
forfeited or suspended. Notwithstanding the foregoing or any other provision
of the Plan or an Award Agreement, all Awards to any Participant that are
subject to any restriction or have not been earned or exercised in full by the
Participant shall be terminated and canceled if the Participant is terminated
for cause, as determined by the Board in its sole discretion.
ARTICLE IV -- INCENTIVE STOCK OPTIONS
4.1 The Board, in its sole discretion, may from time to time on or
after the Effective Date grant Incentive Stock Options to Eligible Employees,
subject to the provisions of this Article IV and Articles III and VI and
subject to the following conditions:
(a) Incentive Stock Options shall be granted only to Eligible
Employees, each of whom may be granted one or more of such Incentive Stock
Options at such time or times determined by the Board.
(b) The Option Price per share of Common Stock for an Incentive
Stock Option shall be set in the Award Agreement, but shall not be less than
(i) one hundred percent (100%) of the Fair Market Value of the Common Stock at
the Grant Date, or (ii) in the case of an Incentive Stock Option granted to a
Ten Percent Stockholder, one hundred ten percent (110%) of the Fair Market
Value of the Common Stock at the Grant Date.
(c) An Incentive Stock Option may be exercised in full or in part
from time to time within ten (10) years from the Grant Date, or such shorter
period as may be specified by the Board as the Option Period and set forth in
the Award Agreement; provided, however, that, in the case of an Incentive
Stock Option granted to a Ten Percent Stockholder, such period shall not
exceed five (5) years from the Grant Date; and further, provided that, in any
event, the Incentive Stock Option shall lapse and cease to be exercisable upon
a Termination of Service or within such period following a Termination of
Service as shall have been determined by the Board and set forth in the
related Award Agreement; and provided, further, that such period shall not
exceed the period of time ending on the date three (3) months following a
Termination of Service, unless employment shall have terminated:
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(i) as a result of Disability, in which event such period
shall not exceed the period of time ending on the date twelve (12) months
following a Termination of Service; or
(ii) as a result of death, or if death shall have occurred
following a Termination of Service (other than as a result of Disability) and
during the period that the Incentive Stock Option was still exercisable, in
which event such period may not exceed the period of time ending on the
earlier of the date twelve (12) months after the date of death;
and provided, further, that such period following a Termination of Service or
death shall in no event extend beyond the original Option Period of the
Incentive Stock Option.
(d) The aggregate Fair Market Value of the shares of Common Stock
with respect to which any Incentive Stock Options (whether under this Plan or
any other plan established by the Company) are first exercisable during any
calendar year by any Eligible Employee shall not exceed one hundred thousand
dollars ($100,000), determined based on the Fair Market Value(s) of such
shares as of their respective Grant Dates; provided, however, that to the
extent permitted under Section 422 of the Code, if the aggregate Fair Market
Values of the shares of Common Stock with respect to which Stock Options
intended to be Incentive Stock Options are first exercisable by any Eligible
Employee during any calendar year (whether such Stock Options are granted
under this Plan or any other plan established by the Company) exceed one
hundred thousand dollars ($100,000), the Stock Options or portions thereof
which exceed such limit (according to the order in which they were granted)
shall be treated as Nonqualified Stock Options.
(e) No Incentive Stock Options may be granted more than ten (10)
years from the Effective Date.
(f) The Award Agreement for each Incentive Stock Option shall
provide that the Participant shall notify the Company if such Participant
sells or otherwise transfers any shares of Common Stock acquired upon exercise
of the Incentive Stock Option within two (2) years of the Grant Date of such
Incentive Stock Option or within one (1) year of the date such shares were
acquired upon the exercise of such Incentive Stock Option.
4.2 Subject to the limitations of Section 3.4, the maximum aggregate
number of shares of Common Stock subject to Incentive Stock Option Awards
shall be the maximum aggregate number of shares available for Awards under the
Plan.
4.3 The Board may provide for any other terms and conditions which it
determines should be imposed for an Incentive Stock Option to qualify under
Section 422 of the Code, as well as any other terms and conditions not
inconsistent with this Article IV or Articles III or VI, as determined in its
sole discretion and set forth in the Award Agreement for such Incentive Stock
Option.
4.4 Each provision of this Article IV and of each Incentive Stock
Option granted hereunder shall be construed in accordance with the provisions
of Section 422 of the Code, and any provision hereof that cannot be so
construed shall be disregarded.
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ARTICLE V -- NONQUALIFIED STOCK OPTIONS
5.1 The Board, in its sole discretion, may from time to time on or
after the Effective Date grant Nonqualified Stock Options to Eligible Persons,
subject to the provisions of this Article V and Articles III and VI and
subject to the following conditions:
(a) Nonqualified Stock Options may be granted to any Eligible
Person, each of whom may be granted one or more of such Nonqualified Stock
Options, at such time or times determined by the Board.
(b) The Option Price per share of Common Stock for a Nonqualified
Stock Option shall be set in the Award Agreement and may be less than one
hundred percent (100%) of the Fair Market Value of the Common Stock at the
Grant Date; provided, however, that the exercise price of each Nonqualified
Stock Option granted under the Plan shall in no event be less than the par
value per share of the Company's Common Stock.
(c) A Nonqualified Stock Option may be exercised in full or in
part from time to time within the Option Period specified by the Board and set
forth in the Award Agreement; provided, however, that, in any event, the
Nonqualified Stock Option shall lapse and cease to be exercisable upon a
Termination of Service or within such period following a Termination of
Service as shall have been determined by the Board and set forth in the
related Award Agreement.
5.2 The Board may provide for any other terms and conditions for a
Nonqualified Stock Option not inconsistent with this Article V or Articles III
or VI, as determined in its sole discretion and set forth in the Award
Agreement for such Nonqualified Stock Option.
ARTICLE VI -- INCIDENTS OF STOCK OPTIONS
6.1 Each Stock Option shall be granted subject to such terms and
conditions, if any, not inconsistent with this Plan, as shall be determined by
the Board and set forth in the related Award Agreement, including any
provisions as to continued employment as consideration for the grant or
exercise of such Stock Option and any provisions which may be advisable to
comply with applicable laws, regulations or rulings of any governmental
authority. Notwithstanding any other provision of the Plan, no Stock Option
can be exercised after the expiration date provided in the applicable Award
Agreement and no Stock Option may provide that, upon exercise of the Stock
Option, a new Stock Option will automatically granted.
6.2 Except as hereinafter described, a Stock Option shall not be
transferable by the Participant other than by will or by the laws of descent
and distribution, and shall be exercisable during the lifetime of the
Participant only by the Participant or the Participant's guardian or legal
representative. In the event of the death of a Participant, any unexercised
Stock Options may be exercised to the extent otherwise provided herein or in
such Participant's Award Agreement by the executor or personal representative
of such Participant's estate or by any person who acquired the right to
exercise such Stock Options by bequest under the Participant's will or by
inheritance. The Board, in its sole discretion, may at any time permit a
Participant to transfer a Nonqualified Stock Option for no consideration to or
for the benefit of one or more members of the Participant's Immediate Family
(including, without limitation, to a trust for the benefit of the Participant
and/or one or more members of such Participant's Immediate Family or a
corporation, partnership or limited liability company established and
controlled by the Participant and/or one or more members of such Participant's
Immediate Family), subject to such limits as the Board may establish. The
transferee of such Nonqualified Stock Option shall remain subject to all terms
and conditions applicable to such Nonqualified Stock Option prior to such
transfer. The foregoing right to transfer the Nonqualified Stock Option, if
granted by the Board shall apply to the right to consent to amendments to the
Award Agreement.
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6.3 Shares of Common Stock purchased upon exercise of a Stock Option
shall be paid for in such amounts, at such times and upon such terms as shall
be determined by the Board, subject to limitations set forth in the Stock
Option Award Agreement. The Board may, in its sole discretion, permit the
exercise of a Stock Option by payment in cash or by tendering shares of Common
Stock (either by actual delivery of such shares or by attestation), or any
combination thereof, as determined by the Board. In the sole discretion of the
Board, payment in shares of Common Stock also may be made with shares received
upon the exercise or partial exercise of the Stock Option, whether or not
involving a series of exercises or partial exercises and whether or not share
certificates for such shares surrendered have been delivered to the
Participant. The Board also may, in its sole discretion, permit the payment of
the exercise price of a Stock Option by the voluntary surrender of all or a
portion of the Stock Option. Shares of Common Stock previously held by the
Participant and surrendered in payment of the Option Price of a Stock Option
shall be valued for such purpose at the Fair Market Value thereof on the date
the Stock Option is exercised.
6.4 The holder of a Stock Option shall have no rights as a shareholder
with respect to any shares covered by the Stock Option (including, without
limitation, any voting rights, the right to inspect or receive the Company's
balance sheets or financial statements or any rights to receive dividends or
non-cash distributions with respect to such shares) until such time as the
holder has exercised the Stock Option and then only with respect to the number
of shares which are the subject of the exercise. No adjustment shall be made
for dividends or other rights for which the record date is prior to the date
such stock certificate is issued.
6.5 The Board may permit the voluntary surrender of all or a portion of
any Stock Option granted under the Plan to be conditioned upon the granting to
the Participant of a new Stock Option for the same or a different number of
shares of Common Stock as the Stock Option surrendered, or may require such
voluntary surrender as a condition precedent to a grant of a new Stock Option
to such Participant. Subject to the provisions of the Plan, such new Stock
Option shall be exercisable at such Option Price, during such Option Period
and on such other terms and conditions as are specified by the Board at the
time the new Stock Option is granted. Upon surrender, the Stock Options
surrendered shall be canceled and the shares of Common Stock previously
subject to them shall be available for the grant of other Stock Options.
6.6 The Board may at any time offer to purchase a Participant's
outstanding Stock Option for a payment equal to the value of such Stock Option
payable in cash, shares of Common Stock or Restricted Stock or other property
upon surrender of the Participant's Stock Option, based on such terms and
conditions as the Board shall establish and communicate to the Participant at
the time that such offer is made.
6.7 The Board shall have the discretion, exercisable either at the time
the Award is granted or at the time the Participant discontinues employment,
to establish as a provision applicable to the exercise of one or more Stock
Options that, during a limited period of exercisability following a
Termination of Service, the Stock Option may be exercised not only with
respect to the number of shares of Common Stock for which it is exercisable at
the time of the Termination of Service but also with respect to one or more
subsequent installments for which the Stock Option would have become
exercisable had the Termination of Service not occurred.
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ARTICLE VII -- RESTRICTED STOCK
7.1 The Board, in its sole discretion, may from time to time on or
after the Effective Date award shares of Restricted Stock to Eligible Persons
as a reward for past service and an incentive for the performance of future
services that will contribute materially to the successful operation of the
Company an its Affiliates, subject to the terms and conditions set forth in
this Article VII.
7.2 The Board shall determine the terms and conditions of any Award of
Restricted Stock, which shall be set forth in the related Award Agreement,
including without limitation:
(a) the purchase price, if any, to be paid for such Restricted
Stock, which may be zero, subject to such minimum consideration as may be
required by applicable law;
(b) the duration of the Restriction Period or Restriction Periods
with respect to such Restricted Stock and whether any events may accelerate or
delay the end of such Restriction Period(s);
(c) the circumstances upon which the restrictions or limitations
shall lapse, and whether such restrictions or limitations shall lapse as to
all shares of Restricted Stock at the end of the Restriction Period or as to a
portion of the shares of Restricted Stock in installments during the
Restriction Period by means of one or more vesting schedules;
(d) whether such Restricted Stock is subject to repurchase by the
Company or to a right of first refusal at a predetermined price or if the
Restricted Stock may be forfeited entirely under certain conditions;
(e) whether any performance goals may apply to a Restriction
Period to shorten or lengthen such period; and
(f) whether dividends and other distributions with respect to such
Restricted Stock are to be paid currently to the Participant or withheld by
the Company for the account of the Participant.
7.3 Awards of Restricted Stock must be accepted within a period of
thirty (30) days after the Grant Date (or such shorter or longer period as the
Board may specify at such time) by executing an Award Agreement with respect
to such Restricted Stock and tendering the purchase price, if any. A
prospective recipient of an Award of Restricted Stock shall not have any
rights with respect to such Award, unless such recipient has executed an Award
Agreement with respect to such Restricted Stock, has delivered a fully
executed copy thereof to the Board and has otherwise complied with the
applicable terms and conditions of such Award.
7.4 In the sole discretion of the Board and as set forth in the Award
Agreement for an Award of Restricted Stock, all shares of Restricted Stock
held by a Participant and still subject to restrictions shall be forfeited by
the Participant upon the Participant's Termination of Service and shall be
reacquired, canceled and retired by the Company. Notwithstanding the
foregoing, unless otherwise provided in an Award Agreement with respect to an
Award of Restricted Stock, in the event of the death, Disability or Retirement
of a Participant during the Restriction Period, or in other cases of special
circumstances (including hardship or other special circumstances of a
Participant whose employment is involuntarily terminated), the Board may elect
to waive in whole or in part any remaining restrictions with respect to all or
any part of such Participant's Restricted Stock, if it finds that a waiver
would be appropriate.
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7.5 Except as otherwise provided in this Article VII, no shares of
Restricted Stock received by a Participant shall be sold, exchanged,
transferred, pledged, hypothecated or otherwise disposed of during the
Restriction Period.
7.6 Upon an Award of Restricted Stock to a Participant, a certificate
or certificates representing the shares of such Restricted Stock will be
issued to and registered in the name of the Participant. Unless otherwise
determined by the Board, such certificate or certificates will be held in
custody by the Company until (i) the Restriction Period expires and the
restrictions or limitations lapse, in which case one or more certificates
representing such shares of Restricted Stock that do not bear a restrictive
legend (other than any legend as required under applicable federal or state
securities laws) shall be delivered to the Participant, or (ii) a prior
forfeiture by the Participant of the shares of Restricted Stock subject to
such Restriction Period, in which case the Company shall cause such
certificate or certificates to be canceled and the shares represented thereby
to be retired, all as set forth in the Participant's Award Agreement. It
shall be a condition of an Award of Restricted Stock that the Participant
deliver to the Company a stock power endorsed in blank relating to the shares
of Restricted Stock to be held in custody by the Company.
7.7 Except as provided in this Article VII or in the related Award
Agreement, a Participant receiving an Award of shares of Restricted Stock
Award shall have, with respect to such shares, all rights of a shareholder of
the Company, including the right to vote the shares and the right to receive
any distributions, unless and until such shares are otherwise forfeited by
such Participant; provided, however, the Board may require that any cash
dividends with respect to such shares of Restricted Stock be automatically
reinvested in additional shares of Restricted Stock subject to the same
restrictions as the underlying Award, or may require that cash dividends and
other distributions on Restricted Stock be withheld by the Company or its
Affiliates for the account of the Participant. The Board shall determine
whether interest shall be paid on amounts withheld, the rate of any such
interest, and the other terms applicable to such withheld amounts.
ARTICLE VIII -- STOCK AWARDS
8.1 The Board, in its sole discretion, may from time to time on or
after the Effective Date grant Stock Awards to Eligible Persons in payment of
compensation that has been earned or as compensation to be earned, including
without limitation compensation awarded or earned concurrently with or prior
to the grant of the Stock Award, subject to the terms and conditions set forth
in this Article VIII.
8.2 For the purposes of this Plan, in determining the value of a Stock
Award, all shares of Common Stock subject to such Stock Award shall be set in
the Award Agreement and may be less than one hundred percent (100%) of the
Fair Market Value of the Common Stock at the Grant Date.
8.3 Unless otherwise determined by the Board and set forth in the
related Award Agreement, shares of Common Stock subject to a Stock Award will
be issued, and one or more certificates representing such shares will be
delivered, to the Participant as soon as practicable following the Grant Date
of such Stock Award. Upon the issuance of such shares and the delivery of one
or more certificates representing such shares to the Participant, such
Participant shall be and become a shareholder of the Company fully entitled to
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receive dividends, to vote and to exercise all other rights of a shareholder
of the Company. Notwithstanding any other provision of this Plan, unless the
Board expressly provides otherwise with respect to a Stock Award, as set forth
in the related Award Agreement, no Stock Award shall be deemed to be an
outstanding Award for purposes of the Plan.
ARTICLE IX -- PERFORMANCE SHARES
9.1 The Board, in its sole discretion, may from time to time on or
after the Effective Date award Performance Shares to Eligible Persons as an
incentive for the performance of future services that will contribute
materially to the successful operation of the Company and its Affiliates,
subject to the terms and conditions set forth in this Article IX.
9.2 The Board shall determine the terms and conditions of any Award of
Performance Shares, which shall be set forth in the related Award Agreement,
including without limitation:
(a) the purchase price, if any, to be paid for such Performance
Shares, which may be zero, subject to such minimum consideration as may be
required by applicable law;
(b) the performance period (the "Performance Period") and/or
performance objectives (the "Performance Objectives") applicable to such
Awards;
(c) the number of Performance Shares that shall be paid to the
Participant if the applicable Performance Objectives are exceeded or met in
whole or in part; and
(d) the form of settlement of a Performance Share.
9.3 At any date, each Performance Share shall have a value equal to the
Fair Market Value of a share of Common Stock.
9.4 Performance Periods may overlap, and Participants may participate
simultaneously with respect to Performance Shares for which different
Performance Periods are prescribed.
9.5 Performance Objectives may vary from Participant to Participant and
between Awards and shall be based upon such performance criteria or
combination of factors as the Board may deem appropriate, including, but not
limited to, minimum earnings per share or return on equity. If during the
course of a Performance Period there shall occur significant events which the
Board expects to have a substantial effect on the applicable Performance
Objectives during such period, the Board may revise such Performance
Objectives.
9.6 In the sole discretion of the Board and as set forth in the Award
Agreement for an Award of Performance Shares, all Performance Shares held by a
Participant and not earned shall be forfeited by the Participant upon the
Participant's Termination of Service. Notwithstanding the foregoing, unless
otherwise provided in an Award Agreement with respect to an Award of
Performance Shares, in the event of the death, Disability or Retirement of a
Participant during the applicable Performance Period, or in other cases of
special circumstances (including hardship or other special circumstances of a
Participant whose employment is involuntarily terminated), the Board may
determine to make a payment in settlement of such Performance Shares at the
end of the Performance Period, based upon the extent to which the Performance
Objectives were satisfied at the end of such period and pro rated for the
portion of the Performance Period during which the Participant was employed by
the Company or an Affiliate; provided, however, that the Board may provide for
an earlier payment in settlement of such Performance Shares in such amount and
under such terms and conditions as the Board deems appropriate or desirable.
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9.7 The settlement of a Performance Share shall be made in cash, whole
shares of Common Stock or a combination thereof and shall be made as soon as
practicable after the end of the applicable Performance Period.
Notwithstanding the foregoing, the Board in its sole discretion may allow a
Participant to defer payment in settlement of Performance Shares on terms and
conditions approved by the Board and set forth in the related Award Agreement
entered into in advance of the time of receipt or constructive receipt of
payment by the Participant.
9.8 Performance Shares shall not be transferable by the Participant.
The Board shall have the authority to place additional restrictions on the
Performance Shares including, but not limited to, restrictions on transfer of
any shares of Common Stock that are delivered to a Participant in settlement
of any Performance Shares.
ARTICLE X -- CHANGES OF CONTROL OR OTHER FUNDAMENTAL CHANGES
10.1 Upon the occurrence of a Change of Control and unless otherwise
provided in the Award Agreement with respect to a particular Award:
(a) all outstanding Stock Options shall become immediately
exercisable in full, subject to any appropriate adjustments in the number of
shares subject to the Stock Option and the Option Price, and shall remain
exercisable for the remaining Option Period, regardless of any provision in
the related Award Agreement limiting the exercisability of such Stock Option
or any portion thereof for any length of time;
(b) all outstanding Performance Shares with respect to which the
applicable Performance Period has not been completed shall be paid out as soon
as practicable as follows:
(i) all Performance Objectives applicable to the Award of
Performance Shares shall be deemed to have been satisfied to the extent
necessary to earn one hundred percent (100%) of the Performance Shares covered
by the Award;
(ii) the applicable Performance Period shall be deemed to
have been completed upon occurrence of the Change of Control;
(iii) the payment to the Participant in settlement of the
Performance Shares shall be the amount determined by the Board, in its sole
discretion, or in the manner stated in the Award Agreement, as multiplied by a
fraction, the numerator of which is the number of full calendar months of the
applicable Performance Period that have elapsed prior to occurrence of the
Change of Control, and the denominator of which is the total number of months
in the original Performance Period; and
(iv) upon the making of any such payment, the Award
Agreement as to which it relates shall be deemed terminated and of no further
force and effect.
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(c) all outstanding shares of Restricted Stock with respect to
which the restrictions have not lapsed shall be deemed vested, and all such
restrictions shall be deemed lapsed and the Restriction Period ended.
10.2 Anything contained herein to the contrary notwithstanding, upon
the dissolution or liquidation of the Company, each Award granted under the
Plan and then outstanding shall terminate; provided, however, that following
the adoption of a plan of dissolution or liquidation, and in any event prior
to the effective date of such dissolution or liquidation, each such
outstanding Award granted hereunder shall be exercisable in full and all
restrictions shall lapse, to the extent set forth in Section 10.1(a), (b) and
(c) above.
10.3 After the merger of one or more corporations into the Company or
any Affiliate, any merger of the Company into another corporation, any
consolidation of the Company or any Affiliate of the Company and one or more
corporations, or any other corporate reorganization of any form involving the
Company as a party thereto and involving any exchange, conversion, adjustment
or other modification of the outstanding shares of the Common Stock, each
Participant shall, at no additional cost, be entitled, upon any exercise of
such Participant's Stock Option, to receive, in lieu of the number of shares
as to which such Stock Option shall then be so exercised, the number and class
of shares of stock or other securities or such other property to which such
Participant would have been entitled to pursuant to the terms of the agreement
of merger or consolidation or reorganization, if at the time of such merger or
consolidation or reorganization, such Participant had been a holder of record
of a number of shares of Common Stock equal to the number of shares as to
which such Stock Option shall then be so exercised. Comparable rights shall
accrue to each Participant in the event of successive mergers, consolidations
or reorganizations of the character described above. The Board may, in its
sole discretion, provide for similar adjustments upon the occurrence of such
events with regard to other outstanding Awards under this Plan. The foregoing
adjustments and the manner of application of the foregoing provisions shall be
determined by the Board in its sole discretion. Any such adjustment may
provide for the elimination of any fractional shares which might otherwise
become subject to an Award. All adjustments made as the result of the
foregoing in respect of each Incentive Stock Option shall be made so that such
Incentive Stock Option shall continue to be an Incentive Stock Option, as
defined in Section 422 of the Code.
ARTICLE XI -- AMENDMENT AND TERMINATION
11.1 Subject to the provisions of Section 11.2, the Board of Directors
at any time and from time to time may amend or terminate the Plan as may be
necessary or desirable to implement or discontinue the Plan or any provision
hereof. To the extent required by the Act or the Code, however, no amendment,
without approval by the Company's shareholders, shall:
(a) materially alter the group of persons eligible to participate
in the Plan;
(b) except as provided in Section 3.4, change the maximum
aggregate number of shares of Common Stock that are available for Awards under
the Plan;
(c) alter the class of individuals eligible to receive an
Incentive Stock Option or increase the limit on Incentive Stock Options set
forth in Section 4.1(d) or the value of shares of Common Stock for which an
Eligible Employee may be granted an Incentive Stock Option.
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11.2 No amendment to or discontinuance of the Plan or any provision
hereof by the Board of Directors or the shareholders of the Company shall,
without the written consent of the Participant, adversely affect (in the sole
discretion of the Board) any Award theretofore granted to such Participant
under this Plan; provided, however, that the Board retains the right and power
to:
(a) annul any Award if the Participant is terminated for cause as
determined by the Board; and
(b) convert any outstanding Incentive Stock Option to a Nonqualified
Stock Option.
11.3 If a Change of Control has occurred, no amendment or termination
shall impair the rights of any person with respect to an outstanding Award as
provided in Article X.
ARTICLE XII -- MISCELLANEOUS PROVISIONS
12.1 Nothing in the Plan or any Award granted hereunder shall confer
upon any Participant any right to continue in the employ of the Company or its
Affiliates or to serve as a Director or shall interfere in any way with the
right of the Company or its Affiliates or the shareholders of the Company, as
applicable, to terminate the employment of a Participant or to release or
remove a Director at any time. Unless specifically provided otherwise, no
Award granted under the Plan shall be deemed salary or compensation for the
purpose of computing benefits under any employee benefit plan or other
arrangement of the Company or its Affiliates for the benefit of their
respective employees unless the Company shall determine otherwise. No
Participant shall have any claim to an Award until it is actually granted
under the Plan and an Award Agreement has been executed and delivered to the
Company. To the extent that any person acquires a right to receive payments
from the Company under the Plan, such right shall, except as otherwise
provided by the Board, be no greater than the right of an unsecured general
creditor of the Company. All payments to be made hereunder shall be paid from
the general funds of the Company, and no special or separate fund shall be
established and no segregation of assets shall be made to assure payment of
such amounts, except as provided in Article VII with respect to Restricted
Stock and except as otherwise provided by the Board.
12.2 The Plan and the grant of Awards shall be subject to all
applicable federal and state laws, rules, and regulations and to such
approvals by any government or regulatory agency as may be required. Any
provision herein relating to compliance with Rule 16b-3 under the Act shall
not be applicable with respect to participation in the Plan by Participants
who are not subject to Section 16 of the Act.
12.3 The terms of the Plan shall be binding upon the Company, its
successors and assigns.
12.4 Neither a Stock Option nor any other type of equity-based
compensation provided for hereunder shall be transferable except as provided
for in Section 6.2. In addition to the transfer restrictions otherwise
contained herein, additional transfer restrictions shall apply to the extent
required by federal or state securities laws. If any Participant makes such a
transfer in violation hereof, any obligation hereunder of the Company to such
Participant shall terminate immediately.
12.5 This Plan and all actions taken hereunder shall be governed by the
laws of the State of Florida.
12.6 Each Participant exercising an Award hereunder agrees to give the
Board prompt written notice of any election made by such Participant under
Section 83(b) of the Code, or any similar provision thereof.
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12.7 If any provision of this Plan or an Award Agreement is or becomes
or is deemed invalid, illegal or unenforceable in any jurisdiction, or would
disqualify the Plan or any Award Agreement under any law deemed applicable by
the Board, such provision shall be construed or deemed amended to conform to
applicable laws, or if it cannot be construed or deemed amended without, in
the determination of the Board, materially altering the intent of the Plan or
the Award Agreement, it shall be stricken, and the remainder of the Plan or
the Award Agreement shall remain in full force and effect.
12.8 The grant of an Award pursuant to this Plan shall not affect in
any way the right or power of the Company or any of its Affiliates to make
adjustments, reclassification, reorganizations, or changes of its capital or
business structure, or to merge or consolidate, or to dissolve, liquidate or
sell, or to transfer all or part of its business or assets.
12.9 The Plan is not subject to the provisions of ERISA or qualified
under Section 401(a) of the Code.
12.10 If a Participant is required to pay to the Company an amount with
respect to income and employment tax withholding obligations in connection
with (i) the exercise of a Nonqualified Stock Option, (ii) certain
dispositions of Common Stock acquired upon the exercise of an Incentive Stock
Option, or (iii) the receipt of Common Stock pursuant to any other Award, then
the issuance of Common Stock to such Participant shall not be made (or the
transfer of shares by such Participant shall not be required to be effected,
as applicable) unless such withholding tax or other withholding liabilities
shall have been satisfied in a manner acceptable to the Company. To the
extent provided by the terms of an Award Agreement, the Participant may
satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under an Award by any of the following
means (in addition to the Company's right to withhold from any compensation
paid to the Participant by the Company) or by a combination of such means: (i)
tendering a cash payment; (ii) authorizing the Company to withhold shares of
Common Stock from the shares of Common Stock otherwise issuable to the
Participant as a result of the exercise or acquisition of Common Stock under
the Award, provided, however, that no shares of Common Stock are withheld with
a value exceeding the minimum amount of tax required to be withheld by law; or
(iii) delivering to the Company owned and unencumbered shares of Common Stock.
Adopted by the Board of Directors this 1st day of December, 2005.
/s/ Marguerite Tudeme
----------------------
Secretary
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