BERNARD, ALLAN & EDWARDS, INC.
2001 INCENTIVE STOCK OPTION PLAN
SECTION 1.
DEFINITIONS
As used herein, the following terms shall have the meanings
indicated below:
(a) The "Company" shall mean BERNARD, ALLAN & EDWARDS, INC. a
Florida corporation, and any subsidiary of the Company.
(b) "Common Stock" shall mean voting common stock of the Company.
(c) The "Plan" means the Bernard, Allan & Edwards 2001 Incentive
Stock Option Plan, as amended hereafter from time to time,
including the form of Option Agreement.
(d) The "Optionee" is an employee of the Company to whom an
option has been granted under the Plan.
(e) The "Internal Revenue Code" is the Internal Revenue
Code of 1986, as amended from time to time.
(f) "Committee" shall mean a Committee of three or more persons
who may be appointed by, and serve at the pleasure of the Board
and shall have such powers and authority as are granted to it by the
Board. Each of the members of the Committee shall be a
"disinterested" person within the meaning of Rule 16b-3, as
then in effect, of the General Rules and Regulations under the
Securities Exchange Act of 1934. As of the effective date of the
Plan, a "disinterested" person under Rule 16b-3 means a person who,
among other things, is not eligible and has not at any time within
one year prior to appointment to the Committee been eligible to
participate in the Plan or in any other plan of the Company
entitling participants to acquire stock, stock options or
stock appreciation rights.
SECTION 2.
PURPOSE
The purpose of the Plan is to promote the success of the Company
by facilitating the employment and retention of competent personnel
and by furnishing incentive to employees upon whose efforts the
success of the Company will depend to a large degree.
It is the intention of the Company to carry out the Plan
through the granting of stock options which will qualify as
"Incentive Stock Options" under the provisions of Section 422 of
the Internal Revenue Code. Adoption of this Plan shall be and is
expressly subject to the condition of approval by the shareholders
of the Company within 12 months before or after the adoption of
such Plan by the Board of Directors.
SECTION 3.
EFFECTIVE DATE OF PLAN
The Plan shall be effective as of the date such Plan is adopted
by the Board of Directors of the Company.
SECTION 4.
ADMINISTRATION
The Plan shall be administered by the Board of Directors of
the Company (the "Board") or, to the extent empowered by the Board,
by the Stock Option Committee as defined in Section 1(f) of this
Plan. The Board shall have all of the powers vested in it under
the provisions of the Plan, including but not limited to exclusive
authority (where applicable and within the limitations described
herein) to determine the employees to whom, and the time or times at
which, options shall be granted, the number of shares subject to
each option and the option price and terms and conditions of each
option. Without limiting the generality of the foregoing, the Board
may, in its sole discretion, determine the number of shares subject
to an option, in proportion to an employee's compensation paid by
the Company.
The Board, or the Committee if so empowered by the Board, shall
have full power and authority to administer and interpret the Plan,
to make and amend rules, regulations and guidelines for administering
the Plan, to prescribe the form and conditions of the respective
stock option agreements (which may vary from Optionee to Optionee)
evidencing each option and to make all other determinations necessary
or advisable for the administration of the Plan. The Board's
interpretation of the Plan, or the Committee's interpretation if so
empowered by the Board, and all actions taken and determinations made
by it pursuant to the power vested hereunder, shall be conclusive and
binding on all parties concerned. No member of the Board or the
Committee shall be liable for any action taken or determination made
in good faith in connection with the administration of the Plan.
In the event the Board appoints a Committee as provided hereunder,
any action of the Committee with respect to the administration of the
Plan shall be taken pursuant to a majority vote of the Committee
members or pursuant to the written resolution of all Committee members.
SECTION 5.
PARTICIPANTS
The Board, or the Committee if so empowered by the Board, shall
from time to time, at its discretion, and without approval of the
shareholders, designate those employees of the Company to whom stock
options shall be granted. Directors of the Company who are otherwise
engaged as employees of the Company may be designated as participants.
The Board, or the Committee if so empowered by the Board, may grant
additional options to some or all participants then holding options
or may grant options solely or partially to new participants.
In designating participants, the Board, or the Committee, shall also
determine the number of shares to be optioned to each such participant.
SECTION 6.
STOCK
The Stock to be optioned under this Plan shall consist of authorized
but unissued shares of voting common stock. 1,000,000 shares of voting
common stock shall be reserved and available for options under the Plan;
provided, however, that the total number of shares of Common Stock
reserved for options under this Plan shall be subject to adjustment as
provided in Section 11 of the Plan. In the event that any outstanding
option under the Plan for any reason expires or is terminated prior to
the exercise thereof, the shares of Common Stock allocable to the
unexercised portion of such option shall continue to be reserved for
options under the Plan and may be optioned hereunder.
SECTION 7.
LIMITATIONS ON OPTIONS
The aggregate fair market value (determined as of the time an option
is granted) of the stock with respect to which incentive stock options
are exercisable for the first time by an Optionee during any calendar
year under this Plan and any other plans of the Company under
Section 422 of the Internal Revenue Code, shall not exceed $100,000.
SECTION 8.
DURATION OF PLAN
Options may be granted pursuant to the Plan from time to time for
a period of 10 years from the earlier of the date the Plan is approved
by the Board of Directors or the date it is approved by the
shareholders of the Company.
SECTION 9.
PAYMENT
Optionees may pay for shares upon exercise of options granted
pursuant to this Plan with cash, personal check, certified check,
Common Stock valued at such stock's then Fair Market Value, or such
other form of payment as may be authorized by the Company. The
Company may, in its sole discretion, limit the form of the payment
available to the Optionee and may exercise such discretion at any
time prior to the termination of the option granted to Optionee or
upon any exercise of the option by the Optionee. With respect to
payment in the form of Common Stock of the Company, the Administrator
may require advance approval or adopt such rules as it deems necessary
to assure compliance with Rule 16(b)-3, or any successor provision,
as then in effect, of the General Rules and Regulations under the
Securities Exchange Act of 1934, if applicable.
SECTION 10.
TERMS AND CONDITIONS OF OPTIONS
Each option granted pursuant to the Plan shall be evidenced by a
written stock option agreement (the "Option Agreement"). The Option
Agreement shall be in such form as may be approved by the Board, or
the Committee if empowered by the Board, from time to time and may
vary from Optionee to Optionee; provided, however, that each
Optionee and each Option Agreement shall comply with and be subject
to the following terms and conditions:
(a)NUMBER OF SHARES AND OPTION PRICE. The Option Agreement shall state
the total number of shares covered by the Option. The option price
per share shall not be less than 100% of the fair market value of the
Common Stock per share on the date the Board or the Committee grants
the option; provided, however that if an Optionee owns stock
possessing more than 10% of the total combined voting power of all
classes of stock of the Company or of its parent or any subsidiary,
the option price per share of an option granted to such Optionee shall
not be less than 110% of the fair market value of the Common Stock per
share on the date of the grant of the option. For purposes thereof,
"fair market value" of the Common Stock per share shall be determined
by the Board, or the Committee if so empowered by the Board, in its
sole discretion by applying principles of valuation with respect to
all such options. The Board shall have full authority and discretion
in establishing the option price and shall be fully protected in so
doing. If such stock is publicly traded as of the date the option is
granted, the "fair market value" of the Common Stock shall be the mean
between the "bid" and "asked" prices quoted by a recognized specialist
in the Common Stock of the Company on the date the option is granted,
or if there are no quoted "bid" and "asked" prices on such date, on
the next preceding date for which there are such quotes; provided that
if such stock is then listed upon an established stock exchange or
exchanges, such "fair market value" shall be the highest closing price
of such stock on such stock exchange or exchanges on the date the
option is granted or, if no sale of such stock shall have occurred on
any stock exchange on that date, on the next preceding day on which
there was a sale of stock.
(b)TERM AND EXERCISABILITY OF OPTION. The term during which any option
granted under the Plan may be exercised shall be established in each
case by the Board, or the Committee if so empowered by the Board, but
in no event shall any option be exercisable during a term of more than
10 years after the date on which it is granted. The Option Agreement
shall state when the option becomes exercisable and shall also state
the maximum term during which the option may be exercised. In the
event an option is exercisable immediately, the manner of exercise of
the option in the event it is not exercised in full immediately shall
be specified in the Option Agreement. The Board, or the Committee if
so empowered by the Board, may accelerate the exercise date of any
option granted hereunder which is not immediately exercisable as of
the date of grant.
(c)TRANSFER OF OPTION. No option shall be transferable, in whole or in
part, by the Optionee other than by will or by the laws of descent and
distribution and, during the Optionee's lifetime, the option may be
exercised only by the Optionee. If the Optionee shall attempt any
transfer of any option granted under the Plan during his lifetime,
such transfer shall be void and the option, to the extent not fully
exercised, shall terminate.
(d)OTHER PROVISIONS. The Option Agreement authorized under this Section
10 shall contain such other provisions as the Board, or the Committee
if so empowered by the Board, shall deem advisable. Any such Option
Agreement shall also contain such limitations and restrictions upon
the exercise of the option as shall be necessary to ensure that such
option will be considered an "Incentive Stock Option" as defined in
Section 422 of the Internal Revenue Code or to conform to any change
therein.
(e)HOLDING PERIOD. The disposition of any shares of Common Stock
acquired by an Optionee pursuant to the exercise of an option
described above shall not be eligible for the favorable taxation
treatment of Section 421(a) of the Internal Revenue Code unless any
shares so acquired are held by the Optionee for at least 2 years from
the date of the granting of the option under which the shares were
acquired and at least one year after the acquisition of such shares
pursuant to the exercise of such option. In the event of an
Optionee's death, such holding period shall not be applicable pursuant
to Section 421(c)(1) of the Internal Revenue Code.
(f)The disposition of any shares of Common Stock acquired by on Optionee
pursuant to the exercise of an option describe above shall not be
eligible for the favorable taxation treatment of Section 421(a) of the
Internal Revenue Code unless any shares so acquired are held by the
Optionee for at least 2 years from the date of the granting of the
option under which the shares were acquired and at least one year
after the acquisition of such shares pursuant to the exercise of such
option. In the event of an Optionee's death, such holding period
shall not be applicable pursuant to Section 421(c)(1) of the Internal
Revenue Code.
SECTION 11.
RECAPITALIZATION
In the event of an increase or decrease in the number of shares of
Common Stock resulting from a subdivision or consolidation of shares or
the payment of a stock dividend or any other increase or decrease in the
number of shares of Common Stock effected without receipt of consideration
by the Company, the number of shares of Common Stock covered by each
outstanding option and the price per share thereof shall be equitably
adjusted by the Board of Directors to reflect such change. Additional
shares which may be credited pursuant to such adjustment shall be subject
to the same restrictions as are applicable to the shares with respect
to which the adjustment relates.
Unless otherwise provided in the Option Agreement, in the event of the
sale by the Company of substantially all of its assets and the consequent
discontinuance of its business, or in the event of a merger, exchange,
consolidation or liquidation of the company, the Board of Directors may
in connection with the Board's adoption of the plan for sale, merger,
exchange, consolidation or liquidation, provide for the complete
termination of this Plan and cancellation of outstanding options not
exercised prior to a date (prior to the effectiveness of such sale, merger,
exchange, consolidation or liquidation) specified by the Board or for the
continuance of the Plan only with respect to the exercise of options which,
under the terms of Paragraph (b) of Section 10, were exercisable as of
the date of adoption by the Board of such plan for sale, merger, exchange,
consolidation or liquidation; provided, however, that in any event
Optionees holding options exercisable as of the date of the Board's
adoption of the plan for sale, merger, exchange, consolidation or
liquidation shall be given either (i) a reasonable time within which to
exercise such exercisable portions of their options prior to the
effectiveness of such sale, merger, exchange, consolidation or liquidation,
or (ii) the right to exercise their respective options as to an equivalent
number of shares of stock of the corporation succeeding the Company by
reason of such sale, merger, exchange, consolidation or liquidation.
The grant of an option pursuant to the Plan shall not limit in
any way the right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital or business
structure or to merge, exchange or consolidate or to dissolve, liquidate,
sell or transfer all of any part of its business or assets.
SECTION 12.
INVESTMENT PURPOSE
No shares of Common Stock shall be issued pursuant to the Plan
unless and until there has been compliance, in the opinion of Company's
counsel, with all applicable legal requirements, including without
limitation, those relating to securities laws and stock exchange
listing requirements. As a condition to the issuance of Common Stock
to Optionee, the Company may require Optionee to (a) represent that
the shares of Common Stock are being acquired for investment and
not resale and to make such other representations as the Board shall deem
necessary or appropriate to qualify the issuance of the shares as exempt from
the Securities Act of 1933 and any other applicable securities laws, and (b)
represent that Optionee shall not dispose of the shares of Common Stock in
violation of the Securities Act of 1933 or any other applicable securities laws.
Company reserves the right to place a legend on any stock certificate issued
upon exercise of an option granted pursuant to the Plan to assure compliance
with this Section 12.
SECTION 13.
RIGHTS AS A SHAREHOLDER
As Optionee (or the Optionee's successor or successors) shall have no
rights as a shareholder with respect to any shares covered by an option until
the date of the issuance of a stock certificate evidencing such shares. No
adjustment shall be made for dividends (ordinary or extraordinary, whether in
cash, securities or other property), distributions or other rights for which
the record date is prior to the date such stock certificate is actually issued
(except as otherwise provided in Section 11 of the Plan).
SECTION 14.
AMENDMENT OF THE PLAN
The Board of Directors of the Company may from time to time, insofar as
permitted by law, suspend or discontinue the Plan or revise or amend it in any
respect; provided, however, that no such revision or amendment, except as is
authorized in Section 9 and 11, shall impair terms and conditions of any option
which is outstanding on the date of such revision or amendment to the material
detriment of the Optionee without the consent of the Optionee. Notwithstanding
the foregoing, no such revision or amendment shall (i) materially increase the
number of shares subject to the Plan except as provided in Section 11 hereof;
(ii) change the designation of the class of employees eligible to receive
options, (iii) decrease the price at which options may be granted, or (iv)
materially increase the benefits accruing to Optionees under the plan, unless
such revision or amendment is approved by the shareholders of the Company.
Furthermore, the Plan may not, without the approval of the shareholders, be
amended in any manner that will cause options to fail to meet the requirements
of "Incentive Stock Options" as defined in Section 422 of the Internal Revenue
Code.
SECTION 15
NO OBLIGATION TO EXERCISE OPTION
The granting of an option shall impose no obligation upon the Optionee to
exercise such option. Further, the granting of an option hereunder shall not
impose upon the Company or any subsidiary any obligation to retain the
Optionee in its employ for any period.
BERNARD, ALLAN & EDWARDS, INC.
2001 INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT, made this _____ day of ____________, 2001, by and between
BERNARD, ALLAN & EDWARDS, INC., a Florida corporation (the "Company"), and
_______________,
(the "Optionee");
WITNESSETH:
WHEREAS, the Optionee on the date hereof is an employee of the Company;
and
WHEREAS, the Company's Board of Directors has adopted an incentive
stock option plan known as the "Bernard, Allan & Edwards 2001 Incentive
Stock Option Plan"
(hereinafter referred to as the "Plan"); and
WHEREAS, the Company desires to grant the Optionee and option to
purchase shares of its voting common stock ("Common Stock");
NOW THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Optionee hereby agree as
follows:
1. GRANT OF OPTION. The Company hereby grants to the Optionee, on the
date of this Agreement, the option to purchase __________ shares of the Common
Stock (the "Option Stock") subject to the terms and conditions herein
contained, and subject only to adjustment in such number of shares as provided
in Section 11 of the Plan.
2. OPTION PRICE. During the term of this option, the purchase price for
the shares of Option Stock granted herein is $____________ per share (not less
than the fair market value as of date of grant), subject only to adjustment of
such price as provided in Section 11 of the Plan.
3. TERM OF OPTION. The term during which this option may be exercised
expires five years after the date of this Agreement unless terminated earlier
under the provisions of Paragraphs 10, 11, or 12 below. This option shall be
exercisable during the term of this Agreement only with respect to the
following percentages of the Option Stock: (i) during the first year of the
term, 20% of the Option Stock; (ii) during the second year of the term, 40%
of the Option Stock; (iii) during the third year of the term, 60% of the
Option Stock; (iv) during the fourth year of the term, 80% of the Option
Stock; and (v) during the fifth year of the term, 100% of the Option Stock.
If this option has been granted prior to approval of the Plan by the Company's
shareholders, this option shall not be exercisable until such approval is
obtained. If this option terminates for any reason, including those set forth
in Paragraphs 10, 11, and 12, all unexercised options (including those not yet
exercisable) shall lapse.
4. PERSONAL EXERCISE BY OPTIONEE. This option shall, during the
lifetime of the Optionee, be exercisable only by said Optionee and shall not
be transferable by the Optionee, in whole or in part, other than by will or
by the laws of descent and distribution.
5. MANNER OF EXERCISE OF OPTION. This option is to be exercised by the
Optionee (or by the Optionee's successor or successors) by giving written
notice to the Company of an election to exercise such option. Such notice
shall specify the number of shares to be purchased hereunder and shall be
delivered to the Company at its principal place of business. An option shall
be considered exercised at the time the Company receives such notice. Upon
receipt of such notice and subject to the provisions of Paragraph 9 below, the
Company shall, within a reasonable time, and upon payment of the full purchase
price for the shares to be purchased, deliver to the Optionee certificates for
the shares so purchased. Payment for shares of Option Stock may be made in
the form of cash, personal check, certified check, Common Stock of the Company
valued at such stock's then fair market value, or such other form of payment
as may be authorized by the Company of the Plan. All requisite original issue
or transfer documentary stamp taxes shall be paid by the Company.
6. RIGHTS AS A SHAREHOLDER. The Optionee or a transferee of this option
shall have no rights as a shareholder with respect to any shares covered by
this option until the date of the issuance of a stock certificate for the
Option Stock. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property), distributions
or other rights for which the record date is prior to the date such stock
certificate is issued, except as provided in Section 11 of the Plan.
7. STOCK OPTION PLAN. The option evidenced by this Agreement is granted
pursuant to the Plan, a copy of which Plan is attached hereto or has been made
available to the Optionee and is hereby made a part of this Agreement. This
Agreement is subject to and in all respects limited and conditioned as provided
in the Plan. This Plan governs this option and the Optionee, and in the event
of any question as to the construction of this Agreement or of a conflict
between the Plan and this Agreement, the Plan shall govern, except as the Plan
otherwise provides.
8. WITHHOLDING TAXES ON DISQUALIFYING DISPOSITION BY OPTIONEE. In the
event of a disqualifying disposition of Option Stock by Optionee, Optionee
hereby agrees to inform the Company of such disposition. Upon notice of a
disqualifying disposition or upon independently learning of such a disposition,
the Company shall withhold from whatever payments are due Optionee appropriate
state and federal income taxes as required by law. In the event the Company is
unable to withhold such taxes, for whatever reason, Optionee hereby agrees to
pay to the Company an amount equal to the amount the Company would otherwise be
required to withhold under state and federal law.
9. INVESTMENT PURPOSE. The Company may require as a condition to the
grant and exercise of this option that any stock acquired pursuant to this
option be acquired for only investment if, in the opinion of counsel for the
Company, such is required or deemed advisable under securities laws or any other
applicable law, regulation or rule of any government or governmental agency. In
this regard, if requested by the Company, the Optionee, prior to the acquisition
of any shares pursuant to this option, shall execute an investment letter to the
effect that the Optionee is acquiring share pursuant to this option for
investment purposes only and not with the intention of making any distribution
of such shares.
10. TERMINATION OF EMPLOYMENT. If the Optionee ceases to be an employee
of the Company for any reason (including termination of employment as a result
of the reorganization, sale or liquidation by the Company) other than because of
death or disability (as described below) this option shall terminate
(notwithstanding Paragraph 3 of this Agreement) on the earlier of (i) three
months after the date of such termination of employment and (ii) this option's
originally stated expiration date. Optionee acknowledges that Optionee is and
shall remain an employee at-will; this option is not intended to and shall not
affect the at-will nature of the employment relationship.
11. TERMINATION OF EMPLOYMENT DUE TO DISABILITY. If the Optionee ceases
to be an employee of the Company because such Optionee is totally disabled, this
option shall terminate (notwithstanding Paragraph 3 of this Agreement) on the
earlier of (i) twelve months after the date of such termination of employment
due to disability and (ii) this option's originally stated expiration date.
Total disability shall not exist unless Optionee is permanently unable to engage
in any substantial gainful activity by reason of a medically determinable
physical and mental impairment which can be expected to continue for an
uninterrupted period of not less than 12 months, and such total disability is
demonstrated to the satisfaction of the Company, in its discretion.
12. DEATH OF OPTIONEE. If the Optionee dies (i) while an employee of the
Company, or (ii) within a period of three months after the termination of his
employment with the Company as provided in Paragraph 10, or (iii) within six
months after the termination of employment with the Company as provided in
Paragraph 11, this option shall terminate (notwithstanding Paragraph 3 of this
Agreement) on the earlier of (i) twelve months after the date of death and (ii)
this option's originally stated expiration date. In such period following the
Optionee's death, this option shall be exercisable only by the Optionee's legal
representative or by the person or persons to whom the Optionee's rights under
this option shall pass by the Optionee's will or by the laws of descent and
distribution.
13. MISCELLANEOUS. This Agreement shall bind and inure to the benefit of
the Company and its successors and assigns and the Optionee and any successor or
successors of the Optionee. It is intended that this option will qualify as an
Incentive Stock Option under the provisions of Section 422 of the Internal
Revenue Code; provided, however, that Optionee hereby agrees to personally bear
whatever income tax and other burden which may arise if this option does not so
qualify and hereby releases the Company from and against any claim Optionee
might otherwise have in the event this option is not so qualified.
IN WITNESS WHEREOF, the Company and the Optionee have executed this
Agreement in the manner appropriate to each, as of the day and year first above
written.
BERNARD, ALLAN & EDWARDS, INC.
By
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Its
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Optionee
Optinee acknowledges receipt of a copy of the Plan concurrently with his
execution of this Agreement.
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