EXHIBIT 10.98
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MACE SECURITY INTERNATIONAL, INC.
1999 STOCK OPTION PLAN
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Effective Date: March 26, 1999
Approved by Stockholders: May 25, 1999
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MACE SECURITYINTERNATIONAL,INC.
1999 STOCK OPTION PLAN
ARTICLE I
PURPOSE AND EFFECTIVE DATE
/S/ 1.1 Purpose. The purpose of the Plan is to provide incentives, through
the grant of stock options, for selected employees, directors, and consultants
of the Company and Related Corporations to promote the long-term growth and
financial success of the Company and Related Corporations.
/S/ 1.2 Effective Date and Expiration of Plan. The Plan shall be effective
on the date on which it is adopted by the Board. Unless earlier terminated by
the Board pursuant to Section 6.3, the Plan shall terminate on the tenth
anniversary of its Effective Date. No Option shall be granted pursuant to the
plan after its termination date, but Options granted prior to the termination
date may extend beyond that date.
ARTICLE II
DEFINITIONS
The following words and phrases, as used in the Plan, shall have these
meanings:
/S/ 2.1 "Board" means the Board of Directors of the Company.
/S/ 2.2 "Cause" means a good faith determination by the Board that an
Optionee has (i) breached any material term or provision of the Optionee's
employment agreement; (ii) engaged in any type of disloyalty to the Company or a
Related Corporation, including without limitation fraud, embezzlement, theft, or
dishonesty in the course of his employment or service to the Company and Related
Corporations; (iii) been convicted of a felony; (iv) disclosed any proprietary
information of the Company or a Related Corporation without the consent of the
Company or the Related Corporation; or (v) breached the terms of any written
confidentiality agreement or any non-competition agreement with the Company or a
Related Corporation in any material respect.
/S/ 2.3 "Code" means the Internal Revenue Code of 1986, as amended.
/S/ 2.4 "Committee" means the Compensation Committee of the Board which shall
consist of not less than two directors of the Company who shall be appointed by,
and shall serve at the pleasure of, the Board. Each member of the Committee,
while serving as such, shall be deemed to be acting in his or her capacity as a
director of the Company. It is intended that each member of the Committee shall
be an "outside director" within the meaning of Treas. Reg. 1.162-27(e)(3) or any
successor thereto, and shall be a Non-Employee Director. Notwithstanding the
foregoing, if the Committee does not consist solely of two (2) or more Non-
Employee Directors, each Option must be approved by the full Board.
/S/ 2.5 "Company" means Mace Security International, Inc. and its successors
and assigns.
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/S/ 2.6 "Company Stock" means the common stock of the Company, par value
$0.01 per share.
/S/ 2.7 "Effective Date" means March 26, 1999, the date the Plan is adopted
by the Board.
/S/ 2.8 "Eligible Individual" means an employee, director (who may, but need
not, be an employee), or consultant of the Company or a Related Corporation.
/S/ 2.9 "Fair Market Value" means, as of any specified date, an amount
arrived at by a good faith determination of the Committee and shall be the value
determined under such other method of determining fair market value as shall be
authorized by the Code, or the rules or regulations thereunder, and adopted by
the Committee.
/S/ 2.10 "Incentive Stock Option" means an option within the meaning of
section 422 of the Code.
/S/ 2.11 "Non-Employee Director" means a director who:
(1) Is not currently an officer (as defined in 17 CFR (S)240.16a-1(f))
of, or otherwise currently employed by, the Company or a parent or subsidiary of
the Company within the meaning of 17 CFR (S)240.16b-3(b)(3);
(2) Does not receive compensation, either directly or indirectly, from
the Company or a parent or subsidiary of the Company within the meaning of 17
CFR (S)240.16b-3(b)(3) for services rendered as a consultant or in any other
capacity other than as a director, except for an amount that does not exceed the
dollar amount for which disclosure would be required under 17 CFR (S)229.404(a);
(3) Does not possess an interest in any other transaction for which
disclosure would be required pursuant to 17 CFR (S)229.404(a); and
(4) Is not engaged in a business relationship for which disclosure
would be required pursuant to 17 CFR (S)229.404(b).
/S/ 2.12 "Nonqualified Stock Option" means an option other than an Incentive
Stock Option.
/S/ 2.13 "Option" means either a Nonqualified Stock Option or an Incentive
Stock Option to purchase Company Stock which is granted under the Plan.
/S/ 2.14 "Option Price" means the price at which Company Stock may be
purchased under an Option as provided in Section 5.4.
/S/ 2.15 "Optionee" means an Eligible Individual who receives an Option.
/S/ 2.16 "Personal Representative" means the person or persons who, upon the
death, disability, or incompetency of an Optionee, shall have acquired, by will
or by the laws of descent and distribution or by other legal proceedings, the
right to exercise an Option theretofore granted to such Optionee.
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/S/ 2.17 "Plan" means the Mace Security International, Inc. 1999 Stock Option
Plan.
/S/ 2.18 "Related Corporation" means either a corporate subsidiary of the
Company, as defined in section 424(f) of the Code, or the corporate parent of
the Company, as defined in section 424(e) of the Code.
/S/ 2.19 "Stock Option Agreement" means an agreement entered into between an
Optionee and the Company under Section 5.3.
ARTICLE III
ADMINISTRATION
/S/ 3.1 Committee to Administer. The Plan shall be administered by the
Committee. The Committee shall have full power and authority to interpret and
administer the Plan, to establish and amend rules and regulations for its
administration, and to make such determinations and interpretations under, or in
connection with, the Plan as it deems necessary or advisable. The Committee's
decisions shall be final and conclusive with respect to the interpretation of
the Plan and any Option made under it. No member of the Board or the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any Option granted under it.
The Committee shall select one of its members as chairman, and shall hold
meetings at such time and places as it may determine. The acts of a majority of
the Committee at a meeting at which a quorum is present, or acts reduced to or
approved in writing by a majority of the members of the Committee, shall be
valid acts of the Committee.
/S/ 3.2 Powers of Committee.
(a) Subject to the provisions of the Plan, the Committee shall have
authority, in its discretion, to determine those Eligible Individuals who shall
receive Options, the time or times when such Options shall be granted, whether
an Incentive Stock Option or a Nonqualified Stock Option shall be granted, and
the number of shares to be subject to each Option.
(b) The Committee shall determine the terms, restrictions, and
provisions of the agreement relating to each Option, including the period over
which the Option shall vest and such terms, restrictions, and provisions as
shall be necessary to cause certain options to qualify as Incentive Stock
Options. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Stock Option Agreement, in
such manner and to the extent the Committee shall determine in order to carry
out the purposes of the Plan.
ARTICLE IV
OPTIONS
/S/ 4.1 Eligibility for Options. An Option may be granted to any Eligible
Individual selected by the Committee. In making this selection and in
determining the form of Option and the number of shares of Company Stock subject
to the Option, the Committee may give consideration to the
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functions and responsibilities of the respective Eligible Individual, his or her
present and potential contributions to the success of the Company and Related
Corporations, the value of his or her services to the Company and Related
Corporations, and such other factors deemed relevant by the Committee; provided,
however, that Incentive Stock Options shall not be granted to any Eligible
Individual who is not an employee of the Company or a Related Corporation. The
Committee may provide in an Option that said Option may be exercised only if
certain conditions, as determined by the Committee, are fulfilled.
/S/ 4.2 Shares Available Under the Plan. The Company Stock to be offered
under the Plan pursuant to Options may be authorized but unissued shares or
reacquired shares, and the Company may purchase shares required for this
purpose, from time to time, if it deems such purchase to be advisable. Subject
to adjustment under Section 6.2, no more than 15,000,000 shares of Company Stock
shall be issuable upon exercise of Options. Any shares of Company Stock subject
to an Option which for any reason is cancelled or terminated without having been
exercised shall again be available for the granting of Options; provided,
however, that (i) if an Option is cancelled, the cancelled Option is counted
against the maximum number of shares for which Options may be granted to an
employee, and (ii) if the Option Price is reduced after the date of grant, the
transaction is treated as a cancellation of an Option and the grant of a new
Option for purposes of counting the maximum number of shares for which Options
may be granted to an employee.
ARTICLE V
TERMS OF OPTIONS
/S/ 5.1 Grant of Stock Options. The Committee may, from time to time,
subject to the provisions of the Plan and such terms and conditions as the
Committee may prescribe, grant Options to any Eligible Individual, provided that
Incentive Stock Options shall not be awarded to any Eligible Individual who is
not an employee of the Company or a Related Corporation. Grants of Incentive
Stock Options and Nonqualified Stock Options shall be separate and not in
tandem. The granting of an Option shall not be deemed either to entitle the
Eligible Individual to, or to disqualify the Eligible Individual from, any
participation in any other grant of Options under the Plan.
/S/ 5.2 Period of Option. Options shall be vested and exercisable in such
installments and on such dates as the Committee may specify, provided that the
Committee may accelerate the vesting and/or exercise date of any outstanding
Options, in its discretion, if it deems such acceleration to be desirable, and
provided further that no Option shall be exercisable within the first six months
from the date of grant. Any Option shares, the right to the purchase of which
has accrued, may be purchased at any time up to the expiration or termination of
the Option. Subject to Section 5.5(b) (relating to the grant of Incentive Stock
Options to more-than-10% shareholders), the duration of each Option shall not be
more than ten years from the date of grant.
/S/ 5.3 Stock Option Agreement. Each Option shall be evidenced by a Stock
Option Agreement, in such form and containing such provisions not inconsistent
with the provisions of the Plan as the Committee from time to time shall
approve. Each Stock Option Agreement shall specify whether the Option is an
Incentive Stock Option or Nonqualified Stock Option; provided, however, if the
Option is not designated in the Stock Option Agreement as an Incentive Stock
Option or Nonqualified Stock Option, the Option shall constitute an Incentive
Stock Option if it complies with the terms of section 422 of the Code, and
otherwise, it shall constitute a Nonqualified Stock Option.
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/S/ 5.4 Option Price, Exercise and Payment.
(a) The Option Price of Company Stock under each Option shall be
determined and fixed by the Committee at the time the Option is granted, but,
subject to Section 5.5(b) (relating to the grant of Incentive Stock Options to
more-than-10% shareholders), shall be a price not less than the greater of 100
percent of the Fair Market Value of Company Stock or the par value thereof at
the date such Option is granted.
(b) Options may be exercised from time to time by giving written notice
to the Company, specifying the number of shares to be purchased. No Option may
be exercised for less than 100 shares unless the issue of a lesser number is
enough to exhaust the Option. The notice of exercise shall be accompanied by
payment in full of the Option Price for the shares being purchased.
(c) The Option Price shall be payable in cash or its equivalent, or if
the Committee, in its discretion, so provides in the related Stock Option
Agreement or, in the case of Options which are not Incentive Stock Options, so
determines at or prior to the time of exercise, in whole or in part:
(i) through the transfer to the Company of shares of Company
Stock previously acquired by the Optionee, provided that, unless
otherwise provided in the related Stock Option Agreement, if such
shares of Company Stock were acquired through the exercise of an
Incentive Stock Option and are used to pay the Option Price of an
Incentive Stock Option, such shares have been held by the Optionee for
a period of not less than the holding period described in section
422(a)(1) of the Code on the date of exercise, or if such shares of
Company Stock were acquired through exercise of a Nonqualified Stock
Option or through exercise of an Incentive Stock Option and are used
to pay the Option Price of a Nonqualified Stock Option, such shares
have been held by the Optionee for a period of more than one year on
the date of exercise;
(ii) by delivering a properly executed notice of exercise of
the Option to the Company and a broker, with irrevocable instructions
to the broker promptly to deliver to the Company the amount of sale or
loan proceeds necessary to pay the exercise price of the Option; or
(iii) through the transfer to the Company of any combination of
cash, or its equivalent, and (i) and/or (ii) above.
However, in no event may the Option Price of an Option be paid through the
transfer to the Company of shares of Company Stock newly acquired by the
Optionee upon exercise of such Option.
In the event such Option Price is paid in whole, or in part, with
previously acquired shares of Company Stock, the portion of the Option Price so
paid shall be equal to the value, as of the date of exercise of the Option, of
such shares. The value of such shares shall be equal to the number of such
shares multiplied by the Fair Market Value of such shares on the date of
exercise (or the immediately preceding trading day if the date of exercise is
not a trading day). The Company shall not issue or transfer Company Stock upon
exercise of an Option until the Option Price is fully paid. If the related Stock
Option Agreement so provides, the Optionee may satisfy any amount
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required to be withheld by the Company under applicable federal, state and/or
local tax laws in effect from time to time, by electing to have the Company
withhold a portion of the shares of Company Stock to be delivered for the
payment of such taxes on such terms and conditions as the Stock Option Agreement
specifies.
/S/ 5.5 Limitations on Incentive Stock Options.
(a) The aggregate Fair Market Value (determined as of the date the
Incentive Stock Option is granted) of the Company 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 plan of the Company) may not
exceed one hundred thousand dollars ($100,000).
(b) If the Optionee owns more than ten percent (10%) of the total
combined voting power of all shares of stock of the Company or of a Related
Corporation at the time an Incentive Stock Option is granted to him or her, the
Option price for the Incentive Stock Option shall be not less than the greater
of (i) one hundred ten percent (110%) of the Fair Market Value of the optioned
shares of Company Stock on the date the Incentive Stock Option is granted, or
(ii) the par value thereof, and such Incentive Stock Option, by its terms, shall
not be exercisable after the expiration of five (5) years from the date the
Incentive Stock Option is granted.
(c) The conditions set forth in this Section 5.5 shall not apply to
Nonqualified Stock Options granted under the Plan.
(d) If an Option intended to be an Incentive Stock Option is granted to
an Eligible Individual and such Option may not be treated in whole or in part as
an Incentive Stock Option pursuant to the limitation in (a) above, such Option
shall be treated as an Incentive Stock Option to the extent it may be so treated
under such limitation, and as a Nonqualified Stock Option as to the remainder.
For purposes of determining whether an Incentive Stock Option would cause such
limitation to be exceeded, Incentive Stock Options shall be taken into account
in the order granted.
/S/ 5.6 Termination of Employment or Service.
(a) If the employment or service as a director or consultant of an
Optionee with the Company and Related Corporations terminates for a reason other
than (i) Cause, (ii) retirement (in the case of an Optionee who is an employee
of the Company or a Related Corporation), (iii) disability (as defined in
section 22(e)(3) of the Code), or (iv) death prior to the expiration date fixed
for his or her Option, such Option may be exercised at any time within three
months after such termination, unless otherwise provided in the related Stock
Option Agreement, to the extent of the number of shares covered by such Option
which were vested and purchasable at the date of such termination, or to any
greater extent permitted by the Committee; provided, however, that an Option
shall not be so exercisable on any date beyond the expiration date of such
Option.
(b) If the employment or service as a director or consultant of an
Optionee with the Company and Related Corporations is terminated by the Company
or a Related Corporation for Cause prior to the expiration date fixed for his or
her Option, such Option shall terminate immediately.
(c) If the employment of an Optionee with the Company and Related
Corporations terminates due to the Optionee's retirement prior to the expiration
date fixed for his or her Option,
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such Option may be exercised at any time within one year following such
retirement, unless otherwise provided in the related Stock Option Agreement, to
the extent of the number of shares covered by such Option which were vested and
purchasable at the date of such retirement, or to any greater extent permitted
by the Committee; provided, however, that an Option shall not be so exercisable
on any date beyond the expiration date of such Option.
(d) If the employment or service as a director or consultant of an
Optionee with the Company and Related Corporations terminates due to the
Optionee's disability (as defined in section 22(e)(3) of the Code) prior to the
expiration date fixed for his or her Option, such Option may be exercised at any
time within one year after such termination, unless otherwise provided in the
related Stock Option Agreement, to the extent of the number of shares covered by
such Option which were vested and purchasable at the date of such termination,
or to any greater extent permitted by the Committee; provided, however, that an
Option shall not be so exercisable on any date beyond the expiration date of
such Option. In the event of the Optionee's legal disability, such Option may be
so exercised by the Optionee's Personal Representative.
(e) Should an Optionee die either while in the employ or while serving
as a director or consultant of the Company and Related Corporations, or after
termination of such employment or service (other than for Cause), the Option
rights of such deceased Optionee may be exercised by his or her Personal
Representative at any time within one year after the Optionee's death, unless
otherwise provided in the related Stock Option Agreement, to the extent of the
number of shares covered by such Option which were vested and purchasable at the
date of such death, or to any greater extent permitted by the Committee;
provided, however, that an Option shall not be so exercisable on any date beyond
the expiration date of such Option.
/S/ 5.7 Shareholder Rights and Privileges. An Optionee shall have no rights
as a shareholder with respect to any shares of Company Stock covered by an
Option until the issuance of a stock certificate to the Optionee representing
such shares.
ARTICLE VI
MISCELLANEOUS PROVISIONS
/S/ 6.1 Nontransferability. No Option shall be transferable otherwise than
by will or, if the Optionee dies intestate, by the laws of descent and
distribution. All Options shall be exercisable during the Optionee's lifetime
only by such Optionee or his or her Personal Representative. Any transfer
contrary to this Section 6.1 shall nullify the Option. If the Optionee is
married at the time of exercise and if the Optionee so requests at the time of
exercise, the certificate or certificates shall be registered in the name of the
Optionee and the Optionee's spouse, jointly, with right of survivorship.
/S/ 6.2 Adjustments Upon Changes in Stock.
(a) The number of shares of Company Stock which may be issued under the
Plan and the maximum number of shares of Company Stock with respect to which
Options may be granted to any Eligible Individual who is an employee of the
Company or a Related Corporation, as stated in Section 4.2 hereof, and the
number of shares issuable upon exercise of outstanding Options under the Plan(as
well as the Option Price per share under such outstanding Options) shall,
subject to the provisions of section 424(a) of the Code, be adjusted, as maybe
deemed appropriate by the
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Committee, to reflect any stock dividend, stock split, share combination, or
similar change in the capitalization of the Company.
(b) In the event of a corporate transaction (as that term is described
in section 424(a) of the Code and the Treasury Regulations issued thereunder as,
for example, a merger, consolidation, acquisition of property or stock,
separation, reorganization, or liquidation), each outstanding Option shall be
assumed by the surviving or successor corporation or by a parent or subsidiary
of such corporation; provided, however, that, in the event of a proposed
corporate transaction, the Committee may terminate all or a portion of the
outstanding Options if it determines that such termination is in the best
interests of the Company. If the Committee decides to terminate outstanding
Options, the Committee shall give each Optionee holding an Option to be
terminated not less than seven (7) days' notice prior to any such termination by
reason of such a corporate transaction, and any such Option which is to be so
terminated may be exercised (if and only to the extent that it is then
exercisable) up to, and including the date immediately preceding such
termination. Further, as provided in Section 3.2(c) hereof the Committee, in its
discretion, may accelerate, in whole or in part, the date on which any or all
Options become exercisable.
(c) The Committee also may, in its discretion, change the terms of any
outstanding Option to reflect any such corporate transaction; provided, however,
that the Committee may not change the terms of an outstanding Incentive Stock
Option in a manner that would constitute a "modification" under section 424(h)
of the Code without the consent of the Optionee affected thereby.
/S/ 6.3 Amendment, Suspension, and Termination of Plan.
(a) The Board may suspend or terminate the Plan or any portion thereof
at any time, and may amend the Plan from time to time in any respect whatsoever,
except that the following amendments shall require shareholder approval (given
in the manner set forth in (b) below):
(i) With respect to Options which are Incentive Stock Options,
any amendment which would: (A) increase the number of shares of
Company Stock with respect to which Incentive Stock Options may be
granted under the Plan, except as provided in Section 6.2; (B) change
the class of employees eligible to receive Incentive Stock Options
under the Plan; or (C) extend the termination date of the Plan with
respect to any Incentive Stock Options granted hereunder;
(ii) Any amendment which would require shareholder approval
pursuant to Treas. Reg. (S) 1.162-27(e)(4)(vi) or any successor
thereto, if compliance with Treas. Reg. (S) 1.162-27(e) or any
successor thereto is intended; and
(iii) Any amendment for which shareholder approval is required
under the rules of the exchange or market on which the Common Stock is
listed.
Notwithstanding the foregoing, no such amendment, suspension, or termination
shall alter or impair any outstanding Option without the consent of the Optionee
affected thereby.
(b) The approval of shareholders must comply with all applicable
provisions of the corporate charter, bylaws, and applicable state law
prescribing the method and degree of
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shareholder approval required for the issuance of corporate stock or options. If
the applicable state law does not prescribe a method and degree of shareholder
approval in such case, the approval of shareholders must be effected - -
(i) By a method and in a degree that would be treated as
adequate under applicable state law in the case of an action
requiring shareholder approval (i.e., an action on which
shareholders would be entitled to vote if the action were taken
at a duly held shareholders' meeting); or
(ii) By a majority of the votes cast (including abstentions, to
the extent abstentions are counted as voting under applicable
state law) in a separate vote at a duly held shareholders'
meeting at which a quorum representing a majority of all
outstanding voting stock is, either in person or by proxy,
present and voting on the plan.
(c) With the consent of the Optionee affected thereby, the Committee may
amend or modify any outstanding Option in any manner to the extent that the
Committee would have had the authority under the Plan initially to grant such
Option as so modified or amended, including without limitation, to change the
date or dates as of which such Option may be exercised.
/S/ 6.4 Nonuniform Determinations. The Committee's determinations under the
Plan, including without limitation, (i) the determination of the Eligible
Individuals to receive Options, (ii) the form, amount, and timing of such
Options, (iii) the terms and provisions of such Options, and (iv) the agreements
evidencing the same, need not be uniform and may be made by it selectively among
Eligible Individuals who receive, or who are eligible to receive, Options under
the Plan, whether or not such Optionees are similarly situated.
/S/ 6.5 General Restriction. Each Option under the Plan shall be subject to
the condition that, if at any time the Committee shall determine that (i) the
listing, registration, or qualification of the shares of Company Stock subject
thereto upon any securities exchange or under any state or federal law, (ii)the
consent or approval of any government or regulatory body, or (iii) an agreement
by the Optionee with respect thereto, is necessary or desirable, then such
Option shall not become exercisable in whole or in part unless such listing,
registration, qualification, consent, approval, or agreement shall have been
effected or obtained free of any conditions not acceptable to the Committee.
Without limiting the generality of the foregoing, each Optionee or his legal
representative or beneficiary may also be required to give satisfactory
assurance that shares purchased upon exercise of an Option are being purchased
for investment and not with a view to distribution, and certificates
representing such shares may be legended accordingly.
/S/ 6.6 No Right To Employment. Neither the action of the Company in
establishing the Plan, nor any action taken by it or by the Board or the
Committee under the Plan, nor any provision of the Plan, shall be construed as
giving to any person the right to be retained in the employ of the Company or
any Related Corporation.
/S/ 6.7 Governing Law. With respect to any Incentive Stock Options granted
pursuant to the Plan and the related Stock Option Agreements, the Plan, such
Incentive Stock Options, and such related Stock Option Agreements shall be
governed by the applicable Code provisions to the maximum extent possible.
Otherwise, the laws of the State of Delaware shall govern the operation
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of, and the rights of Optionees under, the Plan, Options granted hereunder, and
the related Stock Option Agreements.
/S/ 6.8 Application of Funds. The proceeds received by the Company from the
sale of Company Stock pursuant to Options granted under the Plan shall be used
for general corporate purposes. Any cash received in payment for shares upon
exercise of an Option to purchase Company Stock shall be added to the general
funds of the Company and shall be used for its corporate purposes. Any Company
Stock received in payment for shares upon exercise of an Option to purchase
Company Stock shall become treasury stock.
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