SCHEDULE 14A
(RULE 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES
EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[X ] Preliminary Proxy Statement
[ ] Confidential, For Use of the Commission Only (as permitted by
Rule 14a-6(e) (2))
[ ] Definitive Proxy Statement
[ ] Definitive Additional materials
[ ] Soliciting Material Under Rule 14a-12
MAXXON, INC.
----------------------------------------------------
(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 14a-6(i) (1) 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:
MAXXON, INC.
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 27, 2004
To the Shareholders of Maxxon, Inc.,
You are cordially invited to attend the Annual Meeting of Shareholders
(the "Meeting") of Maxxon, Inc., (the "Company") to be held at the Tulsa
Marriott Southern Hills, 1902 East 71st Street, Tulsa, Oklahoma on May 27, 2004,
beginning at 10:00 a.m. local time, for the following purposes:
(1) To elect Gifford Mabie as director to serve until the next annual
meeting of shareholders;
(2) To approve an amendment to the Company's Articles of Incorporation
to increase the authorized number of shares of common stock from 75,000,000 to
250,000,000;
(3) To adopt the 2004 Stock Incentive Plan and to reserve 25,000,000
shares pursuant thereto;
(4) To ratify the selection of Sutton Robinson Freeman & Co., P.C. as
independent auditors for the fiscal year ending December 31, 2004; and
(5) To transact such other business as may properly come before the
Meeting.
Shareholders of record at the close of business on March 31, 2004 are
entitled to notice of and to vote at the Meeting and at any and all adjournments
of the Meeting. If you are unable to attend the Meeting in person, you are urged
to sign, date and return the enclosed proxy as it is necessary that holders of a
majority of the outstanding shares be present in person or by proxy in order to
obtain a quorum for the Meeting. The proxy may be returned in the accompanying
self-address envelope, which requires no postage if mailed in the United States.
If you plan to attend the Meeting
Please note that space limitations make it necessary to limit
attendance to shareholders only. Admission to the Meeting will be on a
first-come, first-served basis. Registration will begin at 9:00 a.m., and
seating will begin at 9:30 a.m. Each shareholder will be asked to present valid
picture identification, such as a driver's license or passport. Shareholders
holding stock in brokerage accounts ("street name" shareholders) will need to
bring a copy of a brokerage statement reflecting ownership of Maxxon common
stock as of the record date.
By order of the Board of Directors,
/s/ GIFFORD MABIE
-------------------------------------
Gifford Mabie
Chief Executive Officer and Director
Dated: April 25, 2004
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MAXXON, INC.
8908 South Yale Avenue, Suite 409
Tulsa, Oklahoma 74137
----------------------
PROXY STATEMENT
Annual Meeting of Shareholders
To Be Held May 27, 2004
----------------------
This Proxy Statement is being furnished to the shareholders of Maxxon,
Inc., a Nevada corporation ("Maxxon" or the "Company"), in connection with the
solicitation of proxies by the Board of Directors for use at the Annual Meeting
of Shareholders of the Company (the "Meeting") to be held on May 27, 2004 and at
any adjournments thereof.
At the Meeting, shareholders will be asked:
(1) To elect Gifford Mabie as director to serve until the next annual
meeting of shareholders;
(2) To approve an amendment to the Company's Articles of Incorporation
to increase the authorized number of shares of common stock from 75,000,000 to
250,000,000;
(3) To adopt the 2004 Stock Incentive Plan and to reserve 25,000,000
shares pursuant thereto;
(4) To ratify the selection of Sutton Robinson Freeman & Co., P.C. as
independent auditors for the fiscal year ending December 31, 2004; and
(5) To transact such other business as may properly come before the
Meeting.
The Board of Directors has fixed the close of business on March 31,
2004 as the record date (the "Record Date") for the determination of the holders
of Maxxon common stock, $0.001 par value ("Common Stock"), entitled to notice of
and to vote at the Meeting. Each such shareholder will be entitled to one vote
for each share of Common Stock held on all matters to come before the Meeting
and may vote in person or by proxy authorized in writing. At the close of
business on March 31, 2004, there were 64,860,279 shares of Common Stock
entitled to vote.
This Proxy Statement and the accompanying form of proxy are first being
sent to holders of the Common Stock on or about May 1, 2004.
The Company is mailing its 2003 Annual Report for the year ended
December 31, 2003, including financial statements, simultaneously with this
Proxy Statement to all shareholders of record as of the close of business on
March 31, 2004. That report does not constitute a part of this proxy
solicitation material.
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THE MEETING
Date, Time and Place
The Meeting will be held on May 27, 2004, at 10:00 a.m. local time, at
the Tulsa Marriott Southern Hills, 1902 East 71st
Street, Tulsa, Oklahoma
Record Date; Shares Outstanding and Entitled to Vote
Shareholders as of the close of business on March 31, 2004 (the "Record
Date") are entitled to notice of and to vote at the Meeting. As of the Record
Date, there were 64,860,279 shares of Common Stock outstanding and entitled to
be voted. Each share of Common Stock entitles its holder to one vote.
Voting Procedures
Quorum. A majority of the shares entitled to vote, represented in
person or by proxy, shall constitute a quorum, which will permit the conduct of
business at the Meeting.
Approval Requirements. All matters, including the election of
directors, shall be decided by vote of the majority of the shares represented at
the Meeting and entitled to vote on the subject matter.
Abstentions and Broker Non-votes. Abstentions and broker non-votes are
counted for purposes of determining the number of shares represented and
entitled to vote at the Meeting. However, abstentions and broker non-votes are
not counted in determining the number of shares voted and do not represent a
vote either FOR or AGAINST an item of business.
Voting and Revocation of Proxies
Shareholders are requested to complete, date, sign and promptly return
the accompanying form of proxy in the enclosed envelope. When your Proxy Form is
returned properly signed, the Shares represented will be voted in accordance
with your directions. You can specify your choices by marking the appropriate
boxes on the enclosed Proxy Form. IF YOUR PROXY FORM IS SIGNED AND RETURNED
WITHOUT SPECIFYING CHOICES, THE SHARES WILL BE VOTED AS RECOMMENDED BY THE
BOARD OF DIRECTORS.
If you hold your shares in "street name" through a broker or other
nominee, your broker or nominee may not be permitted to exercise voting
discretion with respect to some of the matters to be acted upon. Thus, if you do
not give your broker or nominee specific instructions, your shares may not be
voted on those matters and will not be counted in determining the number of
shares necessary for approval.
You can change or revoke your proxy at any time before it is voted at
the Meeting by submitting another proxy by mail with a more recent date than
that of the proxy first given, or by sending written notice of revocation to our
secretary, or by attending the Meeting and voting in person. If your shares are
held in "street name", in the name of a bank, broker or other holder of record,
you must obtain a proxy, executed in your favor, from the holder of record to be
able to vote at the Meeting.
YOUR VOTE IS IMPORTANT. PLEASE SIGN AND RETURN THE PROXY FORM WHETHER
OR NOT YOU PLAN TO ATTEND THE MEETING.
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Solicitation and Cost
The Company will bear the costs of solicitation of proxies for the
Meeting. In addition to solicitation by mail, the Company's director and
employees may solicit proxies from shareholders by telephone, telegram, personal
interview or otherwise. The Company's director and employees will not receive
additional compensation but may be reimbursed for out-of-pocket expenses in
connection with such solicitation. Brokers, nominees and fiduciaries and other
custodians have been requested to forward soliciting material to the beneficial
owners of shares of Common Stock held of record by them, and such custodians
will be reimbursed for their reasonable expenses.
If you plan to attend the Meeting
Please note that space limitations make it necessary to limit
attendance to shareholders only. Admission to the Meeting will be on a
first-come, first-served basis. Registration will begin at 9:00 a.m., and
seating will begin at 9:30 a.m. Each shareholder will be asked to present valid
picture identification, such as a driver's license or passport. Shareholders
holding stock in brokerage accounts ("street name" shareholders) will need to
bring a copy of a brokerage statement reflecting ownership of Maxxon common
stock as of the record date.
PROPOSAL NO. 1
ELECTION OF DIRECTOR
Gifford Mabie has been nominated to serve as only director until the
next annual meeting of shareholders. Mr. Mabie has served the Company as its
director and officer without being paid his cash salary since 2002 and without
the benefit of director/officer liability insurance coverage. From time to time,
Mr. Mabie may receive restricted stock or stock options, the issuance of which
is more fully described in "Executive Compensation."
Gifford M. Mabie, age 63, is the sole officer and director of Maxxon.
He is a founder of the Company and has served as an officer and director since
May 20, 1997. Mr. Mabie is also a director of Lexon, Inc. (OTC: LXXN). From 1982
to 1994, Mr. Mabie was Senior Vice President of CIS Technologies, Inc. (NASD:
CISI), a leading healthcare information company that was purchased by National
Data Corporation (NYSE: NDC) in 1996. Mr. Mabie was instrumental in raising over
$40 Million in capital that funded acquisitions and new product development. As
a result, that company's revenues grew from $105,000 in 1987 to over $40 Million
in 1995. Prior to CIS, Mr. Mabie was with Honeywell Information Systems, Inc.
and was Corporate Controller with W.B. Dunavant and Company, one of the world's
largest cotton brokers. He holds degrees in accounting and economics from
Memphis State University and served for eight years in the U.S. Navy.
Certain Legal Proceedings. Mr. Mabie has not been involved in any of
the events that are set forth under Item 401 of Regulation S-B. On December 31,
2002, the Securities and Exchange Commission filed a civil complaint in the
Northern District Court of Oklahoma against Maxxon, Mr. Mabie and two company
employees. The complaint alleges that from 1997 to 1999, Maxxon and Mr. Mabie
made false or misleading statements regarding the Kaufhold syringe, a safety
syringe technology that the Company licensed in 1997 and discontinued in late
1999. The complaint also alleges that Maxxon, Mr. Mabie, and employees made
false or misleading statements, or failed to disclose information, concerning
the status of the Company's application for FDA approval, filed December 10,
2001, of the Rippstein Syringe, a safety syringe technology that the Company
licensed in late 1999. The Company, Mr. Mabie and the employees each deny the
SEC's claims, as they are without merit, and are vigorously defending against
the claims.
The Board recommends a vote FOR Proposal No. 1.
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INFORMATION CONCERNING THE BOARD OF DIRECTORS,
BOARD COMMITTEES AND DIRECTOR COMPENSATION
The Company has no standing audit, nominating and/or compensation
committees or committees performing similar functions. The Company presently has
only one director who receives no compensation for serving as a director and
serves without benefit of director liability insurance coverage. The Company
does not anticipate increasing the number of members of the Board until such
time as the Company is able to compensate members for serving as a director and
to obtain officer/director liability insurance.
DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY
Gifford Mabie is the Company's only director and executive officer. He
is a founder of the Company and has served as an officer and director since May
20, 1997.
EXECUTIVE COMPENSATION
Summary Compensation Table
Long Term Compensation
------------------------------------
Annual Compensation Awards Payouts
--------------------------------- -------------------------- ---------
Name and Restricted Securities All
Principal Other Annual Stock Underlying LTIP Other
Position Year Salary(1) Bonus Compensation Awards(2) Options/SARs Payouts Compensation
--------------- -------- ---------- ------- -------------- ----------- -------------- --------- --------------
Gifford M.
Mabie, CEO 2003 $100,000 $-0- $-0- $80,000 -0- $-0- $-0-
2002 $100,000
(1) Mr. Mabie's cash salary for 2003 and 2002 was accrued by the Company
but has not been paid to Mr. Mabie as of the date of this filing.
(2) Represents the fair market value of the 4,000,000 shares of restricted
common stock issued to Mr. Mabie on October 1, 2003.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-End Option/SAR Values
- --------------------------------------------------------------------------------
Number of Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
Shares FY-End FY-End
Acquired on Exercisable/ Exercisable/
Name Exercise Value Realized Unexercisable Unexercisable
------------------------- ---------------- ---------------- ---------------------- -------------------
Gifford M. Mabie, CEO N/A N/A 300,000(1) None (2)
(1) Options were granted to Mr. Mabie during 1998 at an exercise price of
$0.50 per share, the closing price of the Company's common stock on the
date of grant. The options expire ten years from the date of grant.
(2) The closing price of our common stock at December 31, 2003 was $0.06
per share, which was less than the $0.50 per share exercise price of
Mr. Mabie's options. Thus the 300,000 options were out-of-the-money.
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SECTION 16 REPORTS
Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires directors, executive officers and beneficial owners of more than 10% of
the outstanding shares of the Company to file with the Securities and Exchange
Commission reports regarding changes in their beneficial ownership of shares in
the Company. There were no beneficial owners of more than 10% of the outstanding
shares of Maxxon, Inc. as of December 31, 2003.
Based solely on a review of the copies of such reports furnished to the
Company and oral representations that no other reports were required, the
Company believes that its sole officer and director during fiscal 2003 complied
on a timely basis with all applicable filing requirements under Section 16(a) of
the Exchange Act.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Employment Agreement with Gifford Mabie
On January 3, 2001, the Company entered into a written employment
agreement with Gifford Mabie, the Company's sole officer and director (the
"Agreement"). On January 3, 2002, the Agreement automatically renewed for two
years. The Agreement provides for automatic and continuous renewal for
consecutive two-year periods. The Agreement can be ended either by us or by Mr.
Mabie upon 30 days' written notice. The Agreement provides for an annual salary
of at least $100,000 with an annual salary increase equal to no less than the
percentage increase in the Consumer Price Index during the previous calendar
year. Mr. Mabie's salary will be accrued by the Company and paid in whole or in
part as cash is available. As of March 31, 2004, the Company owed Mr. Mabie
$223,333 pursuant to the Agreement. The Company is in default under the terms of
the Agreement and there is no assurance that Mr. Mabie will continue to serve
the Company without being paid.
If Mr. Mabie resigns or is terminated for any reason, his accrued and
unpaid salary plus severance pay ranging from three (3) months to twenty-four
(24) months, depending on the circumstances of his departure, will be due and
payable within 30 days of his resignation or termination. Under the employment
agreement, the Company provides certain fringe benefits, including, but not
limited to, participation in pension plans, profit-sharing plans, employee stock
ownership plans, stock appreciation rights, hospitalization and health
insurance, disability and life insurance, paid vacation and sick leave. The
Company will reimburse Mr. Mabie for any reasonable and necessary business
expenses, including travel and entertainment expenses that are necessary to
carry out his duties. Mr. Mabie has the right to participate in other businesses
as long as those businesses do not compete with us and so long as he devotes the
necessary working time, as determined in his sole discretion, to the Company's
business activities.
Pursuant to the Agreement, the Company will indemnify Mr. Mabie for all
legal expenses and liabilities incurred with any proceeding involving him by
reason of his being an officer, director, employee or agent of the Company. The
Company will pay reasonable attorney fees and expenses as incurred in the event
that, in Mr. Mabie's sole judgment, he needs to retain counsel or otherwise
expend personal funds for his defense. If there is a change in control, Mr.
Mabie has the right to resign. A change in control is defined as a change in the
majority of Directors within any twelve month period without 2/3 approval of the
shares outstanding and entitled to vote, or a merger where less than 50 percent
of the outstanding common stock survives and a majority of the Board of
Directors remains, or the sale of substantially all of the Company's assets, or
if any other person or group acquires more than 50 percent of the voting
capital. The Agreement states he will not compete with us for one-year after he
resigns voluntarily or is terminated for cause. If Mr. Mabie is terminated
without cause or if he resigns because a change of control has occurred, then
the non-compete clause of the Agreement will not be applicable.
-7-
On January 3, 2001, in connection with the Agreement, Mr. Mabie
purchased 850,000 shares of Maxxon common stock at $0.15 per share, the closing
price of the common stock on the date of the transaction. As payment for the
shares, Mr. Mabie gave the Company an unsecured promissory note in the amount of
$127,500. The note is due January 3, 2008 and accrues interest at 8% per year.
As of December 31, 2003, the principal balance owed was $84,618.
Restricted Stock Issued During 2003
On October 1, 2003, the Company issued 4,000,000 shares of its
restricted common stock to Gifford Mabie. The Company recorded an expense of
$80,000 related to the restricted stock issuance.
SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND MANAGEMENT
Except as set forth below, the Company knows of no single person or
group that is the beneficial owner of more than 5% of the Company's common
stock. The following table also shows the amount of common stock of the Company
beneficially owned (unless otherwise indicated) by the Company's sole officer
and director. Except as otherwise indicated, all information is as of March 31,
2004 and ownership consists of sole voting and investment power.
Beneficial Percentage of
Relationship to Ownership Outstanding
Name and Address Company Common Stock (1) Common Stock (2)
------------------------------------------- ---------------------- ------------------ --------------------
Gifford M. Mabie........................ Sole Officer and 6,300,000 (3) 9.67%
9202 South Toledo Avenue Director
Tulsa, OK 74137
Rhonda R. Vincent....................... Employee and 4,684,700 (3) 7.19%
9202 South Toledo Avenue Beneficial Owner
Tulsa, OK 74137
Sole Officer and Director,
Employees and Beneficial Owners
as a Group (2 persons)......................................... 10,984,700 16.78%
(1) Includes shares of common stock to be issued upon the exercise of
options that are currently exercisable or will become exercisable
within 60 days of March 31, 2004.
(2) For each shareholder listed above, his or her percentage of
outstanding common stock was based on 64,860,279 shares issued and
outstanding as of March 31, 2004, plus the shares which each
shareholder has the right to acquire within 60 days of March 31, 2004.
(3) Includes options to purchase 300,000 shares of common stock
exercisable at $0.50 per share. On or before January 20, 2008.
-8-
PROPOSAL NO. 2
AUTHORIZATION TO AMEND THE ARTICLES OF INCORPORATION
TO INCREASE THE NUMBER OF AUTHORIZED COMMON SHARES
The Board of Directors has approved and recommends that the
shareholders approve an amendment to the Company's Articles of Incorporation to
increase the number of authorized shares of common stock from 75,000,000 to
250,000,000.
The Company is presently authorized to issue 75,000,000 shares of
common stock, of which 64,860,279 shares were issued and outstanding as of March
31, 2004. The additional 175,000,000 authorized shares would have the same
rights and privileges as the common stock presently outstanding. Holders of
common stock have no preemptive rights to subscribe for any additional common
stock of the Company.
The Company believes that it is desirable to have additional authorized
shares of common stock available for funding, for acquisitions, for employee
benefit programs and for other general corporate purposes in the proximate
future. The terms of the securities cannot be stated or estimated with respect
to all of the securities to be authorized. These additional shares may dilute
the existing shareholders, depending on future circumstances. If the amendment
is approved, the additional shares would be available for issuance without
further action by the shareholders, unless such action is required by applicable
law or any stock exchange or other quotation system through which Maxxon's
securities may be listed or quoted in the future.
The Board recommends a vote FOR Proposal No. 2.
PROPOSAL NO. 3
APPROVAL OF THE COMPANY'S 2004 STOCK INCENTIVE PLAN
The Board has approved, subject to stockholder approval, the adoption
of the Company's 2004 Stock Incentive Plan (the "Plan") for which 25,000,000
shares of Maxxon common stock would be reserved, if the increase in the number
of authorized common shares as outlined in Item 2 is approved.
The Plan replaces the Company's previous Stock Option Plan
The Board of Directors of the Company believes that the availability of
stock options and other stock incentives is an important factor in the Company's
ability to attract and retain qualified employees and to provide an incentive
for them to exert their best efforts on behalf of the Company. In addition, in
light of the limited amount of working capital available to it, the Company has,
and may periodically continue to, use stock options and other incentive awards
to compensate consultants that provide services to the Company.
Description of the 2004 Stock Incentive Plan
A brief description of the material features of the Plan is set forth
below, but is qualified by reference to the full text of the Plan, which is
attached as Appendix A to this Proxy Statement.
Purpose of the Plan
The purpose of the Plan is to enable the Company to attract and retain
the services of (1) selected employees, officers and directors and (2) selected
non-employee agents, consultants, advisers and independent contractors. For
purposes of the Plan, a person is considered to be employed
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by the Company or in the Company's service if the person is employed by the
Company or in the service of the Company or any parent or subsidiary of the
Company.
Administration
The Company's Board of Directors administers the Plan. Subject to the
provisions of the Plan, the Board of Directors may adopt and amend rules and
regulations relating to the administration of the Plan, advance the lapse of any
waiting period, accelerate any exercise date, waive or modify any restriction
applicable to shares not imposed by law and make all other determinations in the
judgment of the Board of Directors necessary or desirable for the administration
of the Plan.
The Board of Directors may delegate to a committee of the Board of
Directors or specified officers of the Company, or both, any or all authority
for administration of the Plan except that only the Board of Directors may amend
or terminate the Plan. The Board of Directors may delegate to any officer or
officers of the Company authority to grant awards under the Plan, subject to any
restrictions the Board of Directors may impose.
The interpretation and construction of the provisions of the Plan and
related agreements by the Board of Directors is final and conclusive. The Board
of Directors may correct any defect, supply any omission or reconcile any
inconsistency in the Plan or in any related agreement in the manner and to the
extent it deems expedient to carry the Plan into effect, and the Board of
Directors shall be the sole and final judge of such expediency.
Eligibility and types of awards under the Plan
Grants under the Plan may be awarded to select directors, officers,
employees, non-employee agents, consultants, advisers, and independent
contractors of the Company or any parent or subsidiary of the Company. The Plan
permits the Board of Directors to grant Incentive Stock Options, Nonqualified
Stock Options, stock bonus awards and to sell shares subject to any terms,
conditions and restrictions they determine.
Shares Reserved for Issuance Under the Plan
The Board of Directors has reserved a total of 25,000,000 shares of the
Company's common stock for issuance under the Plan. The number and kind of
shares available for grants under the Plan and all other share amounts set forth
in the Plan shall be appropriately adjusted by the Board of Directors if the
outstanding common stock is increased or decreased or changed into or exchanged
for a different number or kind of shares or other securities of the Company by
reason of any stock split, combination of shares, dividend payable in shares,
recapitalization or reclassification. In addition, the Board of Directors shall
make appropriate adjustment in the number and kind of shares as to which
outstanding options, or unexercised portions thereof, shall be exercisable so
that the optionee's proportionate interest before and after the occurrence of
the event is maintained. Any such adjustments by the Board of Directors shall be
conclusive.
If an option granted under the Plan expires, terminates or is canceled,
any unissued shares become available under the Plan. If shares awarded as a
bonus or sold as restricted stock are forfeited to the Company or repurchased by
the Company, the shares forfeited or repurchased shall again become available
for issuance under the Plan.
Amendment and Termination of the Plan
The Board of Directors may amend the Plan at any time. Except as
specified in the Plan with respect to treatment of options in case of a merger
or reorganization and changes in outstanding options
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in connection with changes in capital structure, no change in an option already
granted may be made without the consent of the holder of the option.
The Plan will continue until all shares available for issuances under
the Plan have been issued and all restrictions on such shares have lapsed or
when earlier terminated by the Board of Directors. The Board of Directors may
suspend or terminate the Plan at any time. Early termination of the Plan shall
not affect any outstanding options or shares subject to restrictions, any right
of the Company to repurchase shares or the forfeitability of shares issued under
the Plan.
Stock Options
With respect to each grant, the Board of Directors determines the
persons to whom options are granted, the option price, the number of shares
subject to each option, the period of each option and the time or times at which
the options may be exercised and whether the option is an Incentive Stock Option
or a Nonqualified Stock Option. At the time of grant of an option or at any time
thereafter, the Board of Directors may provide that an optionee who exercised an
option with Common Stock of the Company shall automatically receive a new option
to purchase additional shares equal to the number of shares surrendered and may
specify the terms and conditions of the new options.
Only employees are eligible to receive Incentive Stock Options. The
aggregate amount of shares for which Incentive Stock Options may become
exercisable under the Plan and other stock incentive plans of the Company for
the first time in any calendar year for an optionee may not exceed $100,000
measured on the fair market value of the stock on the date of grant. If the
aggregate fair market value exceeds $100,000 in any year, that portion of the
option or options that do not exceed $100,000, to the extent of whole shares,
shall be treated as an Incentive Stock Option and the remaining portion shall be
treated as a Nonqualified Stock Option. This treatment will be applied to
multiple options in the order in which they were granted. The Company will treat
an exercise of all or any portion of an Incentive Stock Option below the
$100,000 limitation as an Incentive Stock Option to the full extent permitted
under the $100,000 limitation unless the optionee designates the option
otherwise. The Board of Directors may at any time without the consent of the
optionee convert an Incentive Stock Option into a Nonqualified Stock Option.
Option Price. The Board of Directors shall determine the exercise price
per share for an option at the time it is granted subject to certain
restrictions. If the option is an Incentive Stock Option, the option price
cannot be less than the fair market value of the common stock on the date of
grant. If an optionee of an Incentive Stock Option at the time of grant owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company, the option price may not be less than 110% of the fair
market value of the common stock on the date of grant. For this purpose, fair
market value shall be the closing price of the common stock last reported before
the time the option is granted, if the stock is publicly traded, or any other
value of the common stock as specified by the Board of Directors.
Non-transferability. Incentive Stock Options and, unless otherwise
determined by the Board of Directors, Nonqualified Stock Options under the Plan
shall not be assignable or transferable by an optionee, either voluntarily or by
operation of law, other than by the optionee's will or the laws of descent or
distribution of the state or country of domicile at the time of death of an
optionee. During an optionee's lifetime, an option may be exercised only by the
optionee.
Duration and Exercise of Options. Options may be exercised in amounts
and at times determined by the Board of Directors. Unless otherwise determined
by the Board of Directors, if the optionee does not exercise an option in any
one year for the full number of shares to which the optionee is entitled in that
year, the optionee may purchase those shares in any subsequent year during the
term of the option.
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Incentive Stock Options granted under the Plan expire on the date fixed
by the Board of Directors subject to two restrictions:
(i) no Incentive Stock Option may be exercised after the
expiration of 10 years from the date it is granted, and
(ii) if the recipient of an Incentive Stock Option owns stock
possessing more than 10 percent of the combined voting power of all
classes of our stock at the time of grant, the expiration date of the
option may not be more than five years after the date of grant.
If an optionee sells or otherwise disposes of the shares of common
stock acquired on exercise of an Incentive Stock Option within two years after
it is granted or within 12 months after it is exercised, then, within 30 days of
the sale or disposition, the optionee shall notify the Company in writing of (i)
the date of the sale or disposition, (ii) the amount realized on the sale or
disposition and (iii) the nature of the sale or disposition.
Except as described under "Termination of Employment or Service, Death
and Assignment" below or as determined by the Board of Directors, an option may
not be exercised unless the optionee is an employee of, or is providing service
to, the Company when exercised and has been continuously so employed or
providing service since the date the option was granted. Absence on leave
approved by the Company or on account of illness or disability shall not be
deemed a termination or interruption of employment or service for this purpose.
Unless otherwise determined by the Board of Directors, vesting of options shall
continue during a medical, family or military leave of absence, whether paid or
unpaid, and vesting of options shall be suspended during any other unpaid leave
of absence.
To exercise an option, the optionee must pay of the full purchase price
for the shares purchased, and submit a written notice to us of the optionee's
binding commitment to purchase shares. The notice must specify the number of
shares of common stock for which the optionee wishes to exercise the option and
the date on which the optionee desires to complete the transaction.
The full purchase price must be paid in cash or by check on or before
the date specified for completion of the purchase of the shares unless the Board
of Directors determines otherwise. Additionally, with the approval of the Board
of Directors, an optionee may pay for all or some of the shares with shares of
our common stock valued at fair market value, restricted stock, other contingent
awards denominated in either stock or cash, promissory notes and other forms of
consideration. Unless otherwise determined by the Board of Directors, common
stock provided in payment must have been previously acquired by the optionee and
held by the optionee for at least six months. For purposes of valuing the common
stock provided in payment of the purchase price, the fair market value shall be
the closing price of the common stock last reported before the time payment in
common stock is made or, if earlier, committed to be made if the common stock is
publicly traded, or, if not, another value of the common stock as specified by
the Board of Directors. No shares shall be issued until full payment has been
made, including all amounts owed for tax withholding. With the consent of the
Board of Directors, an optionee may request the Company to apply the shares to
be received upon the exercise of a portion of a stock option (even though stock
certificates have not yet been issued) to satisfy the purchase price for
additional portions of the option automatically. The optionee must comply with
any requirements specified by the Board of Directors for satisfaction of
applicable federal, state and local tax withholding requirements, as well as any
applicable federal or state securities laws.
Termination of Employment or Service, Death and Assignment.
Unless otherwise determined by the Board of Directors, if an optionee
ceases to be employed by or to provide service to the Company for any reason
other than death, total disability or bona fide early
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retirement, as defined in the Plan, the optionee may exercise any option that he
or she holds at the date that employment terminates at any time before the
expiration date of the option or 3 months (6 months for a Nonqualified Stock
Option) following the termination date of the optionee, whichever is earlier,
but only if and to the extent the option was exercisable as of the termination
date. Any portion of an option not exercisable at the date of termination will
lapse.
Unless otherwise determined by our Board of Directors, if the
optionee's employment or service terminates because of total disability, the
optionee may exercise any option held on the termination date at any time before
the earlier of the option's expiration date or 3 months (6 months for a
Nonqualified Stock Option) after the date of termination, but only to the extent
the option was exercisable on the date of termination. The term "total
disability" means a medically determinable mental or physical impairment of the
optionee which is expected to result in death or which has lasted or is expected
to last for a continuous period of 12 months or more and which, in the opinion
of the Board of Directors and the opinion of two independent physicians, causes
the optionee to be unable to perform his or her duties as an employee, director,
officer or consultant of the Company and to be engaged in any substantial
gainful activity. Total disability shall be deemed to have occurred on the first
day after the two independent physicians have furnished their written opinion of
total disability to the Company and the Board of Directors has reached an
opinion of total disability.
Unless otherwise determined by the Board of Directors, if an optionee
dies while in the Company's employment or providing services to the Company, any
option may be exercised at any time before the expiration date of the option or
before the date that is 12 months after the date of death, whichever is the
shorter period. The option may be exercised, however, only if and to the extent
the optionee was entitled to exercise the option at the date of death and only
by the person or persons to whom the optionee's rights under the option pass by
the optionee's will or by the laws of descent and distribution of the state or
country of the optionee's domicile at the time of death.
To the extent that the option of any deceased optionee or any optionee
whose employment or service terminates is not exercised within the applicable
period, all further rights to purchase shares pursuant to the option shall cease
and terminate.
Stock Bonuses
The Board of Directors may award shares under the Plan as stock bonuses.
Shares awarded as a bonus shall be subject to the terms, conditions and
restrictions determined by the Board of Directors. The restrictions may include
restrictions concerning transferability and forfeiture of the shares awarded.
The Board of Directors may require the recipient to sign an agreement as a
condition of the award, but may not require the recipient to pay any monetary
consideration other than amounts necessary to satisfy tax withholding
requirements. The agreement may contain any terms, conditions, restrictions,
representations and warranties required by the Board of Directors. The
certificates representing the shares awarded shall bear any legends required by
the Board of Directors.
The Company may require any recipient of a stock bonus to pay to the
Company in cash or by check upon demand amounts necessary to satisfy any
applicable federal, state or local tax withholding requirements. If the
recipient fails to pay the amount demanded, the Company may withhold that amount
from other amounts payable to the recipient, including salary, subject to
applicable law. With consent of the Board of Directors, a recipient may satisfy
this obligation, in whole or in part, by instructing the Company to withhold
from any shares to be issued or by delivering to the Company other shares of
common stock of the Company. However, the number of shares so withheld or
delivered cannot exceed the minimum amount necessary to satisfy the required
withholding obligations.
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Restricted Stock
Subject to any restrictions imposed by applicable law and the Plan, the
Board of Directors may issue shares of "restricted stock" under the Plan for any
consideration (including promissory notes and services) determined by the Board
of Directors. Shares of restricted stock issued under the Plan shall be subject
to the terms, conditions and restrictions of the Plan and any other terms,
conditions and restrictions determined by the Board of Directors. The
restrictions may include, subject to any limitations imposed by applicable law,
without limitation, restrictions concerning transferability, repurchase by the
Company and forfeiture of the shares issued.
The purchase price for any shares of restricted stock issued to any
person possessing more than 10 percent of the total combined voting power of all
classes of stock of the Company or any parent or subsidiary must be at least
100% of the fair market value of the common stock of the Company on the date the
purchase agreement is signed.
All shares of restricted stock must be subject to a purchase agreement,
which must be executed by the Company and the prospective purchaser of the
shares of restricted stock before the delivery of certificates representing the
shares to the purchaser. The purchase agreement may contain any terms,
conditions, restrictions, representations and warranties required by the Board
of Directors. The certificates representing the shares shall bear any legends
required by the Board of Directors.
The rights of any purchaser of shares of restricted stock are
nonassignable and nontransferable, either voluntarily or by operation of law,
except by will, by the laws of descent and distribution of the state or country
of such person's at the time of death.
The Company may require any recipient of restricted stock to pay to the
Company in cash or by check upon demand amounts necessary to satisfy any
applicable federal, state or local tax withholding requirements. If the
recipient fails to pay the amount demanded, the Company, its parent or a
subsidiary may withhold that amount from other amounts payable to the recipient,
including salary, subject to applicable law. With consent of the Board of
Directors, a recipient may satisfy this obligation, in whole or in part, by
instructing the Company to withhold from any shares to be issued or by
delivering to the Company other shares of common stock of the Company. However,
the number of shares so withheld or delivered cannot exceed the minimum amount
necessary to satisfy the required withholding obligation.
Performance-based Awards
Under the Plan, the Board of Directors may grant performance-based
awards. These awards are intended to qualify as qualified performance-based
compensation under Section 162(m) of the Code and regulations thereunder
("Performance-based Awards"). Performance-based Awards shall be denominated at
the time of grant either in common stock of the Company or in dollar amounts.
Performance-based Awards may be granted in whole or in part if the Company
achieves written objective goals established by the Board of Directors over a
designated period of time. Payment of an award earned may be in cash or stock or
both as determined by the Board of Directors. In addition to the requirement
that participants satisfy certain performance goals, the Board of Directors may
impose additional restrictions to payment under a Performance-based Award.
Tax Consequences
The following is a general discussion of certain federal income tax
considerations concerning Incentive Stock Options and Nonqualified Stock
Options. The discussion does not describe any tax consequences of stock bonuses,
stock appreciation rights, restricted stock or cash bonus rights, nor does the
discussion describe any tax consequences under the tax laws of any state,
locality or foreign jurisdiction. Furthermore, the discussion is based on the
provisions of the Code and regulations, and
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rulings and judicial decisions thereunder, as of the date hereof, and such
authorities may be repealed or modified retroactively so as to result in federal
income tax consequences different from those discussed below. The discussion
below does not discuss all federal income tax consequences that may be relevant
to a particular optionee, and is not intended as tax advice. Each optionee is
urged to consult his or her individual tax adviser.
Incentive Stock Options. Certain options authorized to be granted under
the Plan are intended to qualify as Incentive Stock Options for federal income
tax purposes. Under federal income tax law currently in effect, the optionee
will recognize no income upon grant or upon a proper exercise of the Incentive
Stock Option, although such exercise may produce alternative minimum tax
liability for the optionee. If an employee exercises an Incentive Stock Option
and does not dispose of any of the option shares within two years following the
date of grant and within one year following the date of exercise, then any gain
realized upon subsequent disposition of the shares will be treated as income
from the sale or exchange of a capital asset. Ordinarily, if an employee
disposes of shares acquired upon exercise of an Incentive Stock Option before
the expiration of either the one-year holding period or the two-year waiting
period, the amount by which the fair market value of the shares on the exercise
date exceeds the exercise price will be taxable as ordinary compensation income
in the year of such disqualifying disposition; however, on certain sales or
exchanges the amount that is taxable as ordinary compensation is limited to the
amount by which the amount realized on the disposition exceeds the exercise
price. The Company will not be allowed any deduction for federal income tax
purposes at either the time of the grant or exercise of an Incentive Stock
Option. Upon any disqualifying disposition by an employee, the Company will
generally be entitled to a deduction to the extent the employee realized
ordinary income.
Nonqualified Stock Options. Certain options authorized to be granted
under the Plan will be treated as Nonqualified Stock Options for federal income
tax purposes. Under federal income tax law presently in effect, no income is
realized by the grantee of a Nonqualified Stock Option pursuant to the Plan
until the option is exercised. At the time of exercise of a Nonqualified Stock
Option, the optionee will realize ordinary compensation income, and the Company
will generally be entitled to a deduction, in the amount by which the market
value of the shares subject to the option at the time of exercise exceeds the
exercise price. The Company is required to withhold on the income amount. Upon
the sale of shares acquired upon exercise of a Nonqualified Stock Option, the
excess of the amount realized from the sale over the market value of the shares
on the date of exercise will be taxable.
An employee who receives stock in connection with the performance of
services will generally realize taxable income at the time of receipt unless the
shares are not substantially vested for purposes of Section 83 of the Code and
the employee elects within 30 days after the original transfer to recognize
income in connection with the original transfer under Section 83(b) of the Code.
If the shares are not vested at the time of receipt, the employee will realize
taxable income in each year in which a portion of the shares substantially vest,
unless the employee a Section 83(b) election is made. The Company generally will
be entitled to a tax deduction equal to the amount includable as income by the
employee at the same time or times as the employee recognizes income with
respect to the shares. The Company is required to withhold on the income amount.
Stock Bonuses. A stock bonus will generally result in compensation
income for the recipient equal to the fair market value of the stock granted on
the date it is granted. When the recipient sells the stock obtained as a stock
bonus, the recipient will recognize capital gain or loss in an amount equal to
the amount realized upon the sale less the recipient's basis. The recipient's
basis will be any income previously recognized with respect to the stock.
Restricted Stock. No income is recognized by a recipient of restricted
stock upon the grant of the stock, unless the recipient elects within 30 days
(pursuant to section 83(b) of the Code) to recognize income at the time the
recipient receives the stock. If the recipient makes the section 83(b) election,
the recipient may not deduct amounts subsequently returned to the Company. If
the recipient does not make
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the section 83(b) election, the recipient will generally recognize ordinary
income and be subject to reporting and withholding requirements when the
restrictions on the stock are removed. The income recognized by the recipient
will be the fair market value of the restricted stock on the date the
restrictions are removed less any amount paid for the shares. When the recipient
sells the restricted stock, the recipient will recognize capital gain or loss in
an amount equal to the amount realized upon the sale less the recipient's basis.
The recipient's basis will be what the recipient paid for the restricted stock
plus any income previously recognized.
Performance-based Awards. No income is recognized by a recipient of a
performance-based award upon the grant of the award. The recipient will
generally recognize ordinary income and be subject to reporting and withholding
requirements when the performance criteria established in the award are
achieved. If payment of the award is in cash, the income recognized will be the
amount of cash receivable by the recipient on the date the performance criteria
is achieved less any amount paid for the shares. If payment of the award is in
the form of stock, the income recognized will be the fair market value of the
stock on the date the performance criteria are achieved less any amount paid for
the shares. If payment of the award is in the form of stock, when the recipient
sells the stock, the recipient will recognize capital gain or loss in an amount
equal to the amount realized upon the sale less the recipient's basis in the
stock. The recipient's basis will be what the recipient paid for the restricted
stock plus any income previously recognized.
Non-Transferability of Options
Each stock option granted under the Plan by its terms shall be
nonassignable and nontransferable by an optionee, either voluntarily or by
operation of law, other than by will or the laws of descent or distribution upon
the death of an optionee, by instrument to an intervivos or testamentary trust
in which the options are to be passed to beneficiaries upon the death of the
person establishing the trust or by gift to immediate family. An option may be
exercised only by an optionee or, after death, by a successor or representative
of an optionee.
Conditions to Issuance of Stock
The Company is under no obligation to effect the registration pursuant
to the Securities Act of 1933, as amended (the "Securities Act") of any shares
of common stock to be issued under the Plan or to effect similar compliance
under any state laws. The Company is not obligated to cause to be issued or
delivered any certificates evidencing shares of common stock pursuant to the
Plan unless and until the Company is advised by its counsel that the issuance
and delivery of such certificates is in compliance with all applicable laws and
regulations of any governmental authority and the requirements of any securities
exchange on which shares of common stock are traded. The Company may require, as
a condition of the issuance and delivery of certificates evidencing shares of
common stock pursuant to the Plan, that the recipient of such shares make such
covenants, agreements and representations, and that such certificates bear such
legends as the Company, in its sole discretion, deems necessary or desirable.
The Board recommends a vote FOR Proposal No. 3.
PROPOSAL NO. 4
RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANTS
The Company has appointed Sutton Robinson Freeman & Co., P.C. ("Sutton
Robinson Freeman") as its independent accountants to audit the financial
statements of the Company for the year ending December 31, 2004. Sutton Robinson
Freeman has served as the Company's independent accountants since 1997. Services
provided to the Company by Sutton Robinson Freeman in fiscal 2003
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included the examination of the Company's financial statements, reviews of
quarterly reports, services related to filings with the Securities and Exchange
Commission, and various tax services.
Audit Fees
Audit Fees consist of assurance and related services that are
reasonably related to the performance of the audit or review of our financial
statements. This category includes fees related to the performance of audits and
attest services not required by statute or regulations, and consultations
regarding the application of GAAP to proposed transactions. The aggregate Audit
Fees billed by Sutton Robinson Freeman for the fiscal years ended December 31,
2003 and 2002 were $6,849 and $9,516 respectively.
Tax Fees
Tax Fees consist of the aggregate fees billed for professional services
rendered by Sutton Robinson Freeman for tax compliance, tax advice, and tax
planning. These services include preparation for federal and state income tax
returns. The aggregate Tax Fees billed for the fiscal years ended December 31,
2003 and 2002 were $903 and $1,810, respectively.
All Other Fees
All Other Fees consists of fees related to review of our Form S-8
registration statement in 2003. All other fees may also include fees for
services which would not impair the independence of the auditor which support
our evaluation of the effectiveness of our internal controls and enhance the
auditor's understanding of our system and controls not included in Audit Related
Fees. The aggregate All Other Fees billed for the fiscal years ended December
31, 2003 and 2002 were $515 and $-0-, respectively.
Audit Committee
The Company's Board functions as its audit committee. It is the policy
of the Company for all work performed by our principal accountant to be approved
in advance by the Board. All of the services described above were approved in
advance by the Board.
Representatives of Sutton Robinson Freeman are expected to attend the
Annual Shareholders Meeting. They have been afforded an opportunity to make a
statement if they desire to do so. Representatives of the firm will be available
to respond to appropriate questions.
The Board recommends a vote FOR Proposal No. 4.
OTHER BUSINESS
As of the date of this proxy statement, the Company knows of no
business that will be presented for consideration at the Meeting other than the
item referred to above. If any other matter is properly brought before the
Meeting for action by shareholders, proxies in the enclosed form returned to the
Company will be voted in accordance with the recommendation of the Board of
Directors or, in the absence of such a recommendation, in accordance with the
judgment of the proxy holder.
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ANNUAL REPORT ON FORM 10-KSB
Included with this proxy statement is a copy of the Company's Annual
Report for the year ended December 31, 2003. This Annual Report is comprised of
the Company's Form 10-KSB, filed with the Securities and Exchange Commission on
March 30, 2004. Exhibits included in the Company's Form 10-KSB were excluded
from the Annual Report. The Form 10-KSB in its entirety is available online at
www.sec.gov or at www.FreeEdgar.com. Any shareholder who wishes to receive a
copy of the Form 10-KSB or Exhibits may do so free of charge upon written
request sent to the Company.
SHAREHOLDER PROPOSALS FOR THE 2005 ANNUAL MEETING
Shareholders interested in submitting a proposal for inclusion in the
proxy materials for the next annual meeting of shareholders may do so by
following the procedures prescribed in SEC Rule 14a-8. To be eligible for
inclusion, stockholder proposals must be received by us no later than October
31, 2004.
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FORM OF PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
MAXXON, INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS
The undersigned hereby constitutes and appoints Gifford Mabie and
Rhonda Vincent, and each of them, the true and lawful attorneys, agents, and
proxies of the undersigned, each with the power to appoint his or her
substitute, and hereby authorizes them to represent and to vote, as designated
on this Form of Proxy, all of the shares of Common Stock of Maxxon, Inc. held of
record on March 31, 2004 by the undersigned at the Annual Meeting of
Shareholders to be held on May 27, 2004 or any adjournment thereof.
1. To elect Gifford Mabie as director to serve
until the next annual meeting of shareholders...... [ ] FOR [ ] WITHHOLD
AUTHORITY
2. To approve an amendment to the Company's
Articles of Incorporation to increase the
authorized number of shares of common stock
from 75,000,000 to 250,000,000..................... [ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To adopt the Company's 2004 Stock Incentive
Plan and to reserve 25,000,000 shares of
common stock for grant thereunder.................. [ ] FOR [ ] AGAINST [ ] ABSTAIN
4. To ratify the selection of Sutton Robinson
Freeman & Co., P.C. as independent accountants
for the fiscal year ending December 31, 2004....... [ ] FOR [ ] AGAINST [ ] ABSTAIN
5. In their discretion, the proxies are authorized to
vote upon such other business as may properly
come before the Meeting............................ [ ] FOR [ ] AGAINST [ ] ABSTAIN
This proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholders. If no direction is made, this
proxy will be voted FOR Proposals 1 through 5.
DATED: _______________________, 2004
-----------------------------------
(Signature)
-----------------------------------
(Signature if jointly held)
NOTE: Please sign exactly as your name appears on your Stock
Certificate. If stock is jointly held, all joint owners should sign. When
signing as attorney, executor, administrator, trustee or guardian, please give
full title as such. If signer is a corporation, please sign the full corporation
name and give the title of signing officer.
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY PROMPTLY
USING THE ENCLOSED POSTAGE-PAID ENVELOPE.
If you plan to attend the Meeting, please check here [ ]
This proxy may be revoked at any time prior to the Meeting by executing
a new proxy or by notifying the Company in writing at Maxxon, Inc., 9202 South
Yale Avenue, Tulsa, OK 74137.
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APPENDIX A
MAXXON, INC. 2004 STOCK INCENTIVE PLAN
1. Purpose. The purpose of this Maxxon, Inc. 2004 Stock Incentive Plan
(the "Plan") is to enable Maxxon, Inc. (the "Company") to attract and retain the
services of (i) selected employees, officers and directors of the Company or any
parent or subsidiary of the Company and (ii) selected nonemployee agents,
consultants, advisers and independent contractors of the Company or any parent
or subsidiary of the Company. For purposes of this Plan, a person is considered
to be employed by or in the service of the Company if the person is employed by
or in the service of any entity (the "Employer") that is either the Company or a
parent or subsidiary of the Company.
2. Shares Subject to the Plan. Subject to adjustment as provided below
and in Section 10, the shares to be offered under the Plan shall consist of
Common Stock of the Company, and the total number of shares of Common Stock that
may be issued under the Plan shall be 25,000,000 shares. If an option or
Performance-Based Award granted under the Plan expires, terminates or is
canceled, the unissued shares subject to that option or Performance-Based Award
shall again be available under the Plan. If shares awarded as a bonus pursuant
to Section 7 or sold pursuant to Section 8 under the Plan are forfeited to or
repurchased by the Company, the number of shares forfeited or repurchased shall
again be available under the Plan.
3. Effective Date and Duration of Plan.
3.1. Effective Date. The Plan shall become effective as of April 8,
2004. No Incentive Stock Option (as defined in Section 5 below) granted under
the Plan shall become exercisable and no payments shall be made under a
Performance-Based Award, however, until the Plan is approved by the
shareholders. The exercise of any Incentive Stock Options granted under the Plan
before approval shall be conditioned on and subject to that approval. Subject to
this limitation, options and Performance-Based Awards may be granted and shares
may be awarded as bonuses or sold under the Plan at any time after the effective
date and before termination of the Plan.
3.2. Duration. The Plan shall continue in effect until all shares
available for issuance under the Plan have been issued and all restrictions on
the shares have lapsed. The Board of Directors may suspend or terminate the Plan
at any time except with respect to options, Performance-Based Awards and shares
subject to restrictions then outstanding under the Plan. Termination shall not
affect any outstanding options, any outstanding Performance-Based Awards or any
right of the Company to repurchase shares or the forfeitability of shares issued
under the Plan.
4. Administration.
4.1. Board of Directors. The Plan shall be administered by the Board of
Directors of the Company, which shall determine and designate the individuals to
whom awards shall be made, the amount of the awards and the other terms and
conditions of the awards. Subject to the provisions of the Plan, the Board of
Directors may adopt and amend rules and regulations relating to administration
of the Plan, advance the lapse of any waiting period, accelerate any exercise
date, waive or modify any restriction applicable to shares (except those
restrictions imposed by law) and make all other determinations in the judgment
of the Board of Directors necessary or desirable for the administration of the
Plan. The interpretation and construction of the provisions of the Plan and
related agreements by the Board of Directors shall be final and conclusive. The
Board of Directors may correct any defect or supply any omission or reconcile
any inconsistency in the Plan or in any related agreement in the manner and to
the extent it deems expedient to carry the Plan into effect, and the Board of
Directors shall be the sole and final judge of such expediency.
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4.2. Committee. The Board of Directors may delegate to any committee of
the Board of Directors (the "Committee") any or all authority for administration
of the Plan. If authority is delegated to the Committee, all references to the
Board of Directors in the Plan shall mean and relate to the Committee, except
(i) as otherwise provided by the Board of Directors and (ii) that only the Board
of Directors may amend or terminate the Plan as provided in Sections 3 and 11.
5. Types of Awards, Eligibility, Limitations. The Board of Directors
may, from time to time, take the following actions, separately or in
combination, under the Plan: (i) grant Incentive Stock Options, as defined in
Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"), as
provided in Sections 6.1 and 6.2; (ii) grant options other than Incentive Stock
Options ("Nonqualified Stock Options") as provided in Sections 6.1 and 6.3;
(iii) award stock bonuses as provided in Section 7; (iv) sell shares subject to
restrictions as provided in Section 8; and (v) award Performance-Based Awards as
provided in Section 9. Awards may be made to employees, including employees who
are officers or directors, and to other individuals described in Section 1
selected by the Board of Directors; provided, however, that only employees of
the Company or any parent or subsidiary of the Company (as defined in
sub-Sections 424(e) and 424(f) of the Code) are eligible to receive Incentive
Stock Options under the Plan. The Board of Directors shall select the
individuals to whom awards shall be made and shall specify the action taken with
respect to each individual to whom an award is made. At the discretion of the
Board of Directors, an individual may be given an election to surrender an award
in exchange for the grant of a new award.
6. Option Grants.
6.1. General Rules Relating to Options.
6.1-1. Terms of Grant. The Board of Directors may grant
options under the Plan. With respect to each option grant, the Board of
Directors shall determine the number of shares subject to the option,
the exercise price, the period of the option, the time or times at
which the option may be exercised and whether the option is an
Incentive Stock Option or a Nonqualified Stock Option. At the time of
the grant of an option or at any time thereafter, the Board of
Directors may provide that an optionee who exercised an option with
Common Stock of the Company shall automatically receive a new option to
purchase additional shares equal to the number of shares surrendered
and may specify the terms and conditions of such new options.
6.1-2. Exercise of Options. Except as provided in Section
6.1-4 or as determined by the Board of Directors, no option granted
under the Plan may be exercised unless at the time of exercise the
optionee is employed by or in the service of the Company and shall have
been so employed or provided such service continuously since the date
the option was granted. Except as provided in Sections 6.1-4 and 10,
options granted under the Plan may be exercised from time to time over
the period stated in each option in amounts and at times prescribed by
the Board of Directors, provided that options may not be exercised for
fractional shares. Unless otherwise determined by the Board of
Directors, if an optionee does not exercise an option in any one year
for the full number of shares to which the optionee is entitled in that
year, the optionee's rights shall be cumulative and the optionee may
purchase those shares in any subsequent year during the term of the
option.
6.1-3. Nontransferability. Each Incentive Stock Option and,
unless otherwise determined by the Board of Directors, each other
option granted under the Plan by its terms (i) shall be nonassignable
and nontransferable by the optionee, either voluntarily or by operation
of law, except by will or by the laws of descent and distribution of
the state or country of the optionee's domicile at the time of death,
and (ii) during the optionee's lifetime, shall be exercisable only by
the optionee.
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6.1-4. Termination of Employment or Service.
6.1-4(a). General Rule. Unless otherwise determined
by the Board of Directors, if an optionee's employment or
service with the Company terminates for any reason other than
because of total disability or death as provided in Sections
6.1-4(b) and (c), his or her option may be exercised at any
time before the expiration date of the option or the
expiration of 30 days after the date of termination, whichever
is the shorter period, but only if and to the extent the
optionee was entitled to exercise the option at the date of
termination.
6.1-4(b). Termination Because of Total Disability.
Unless otherwise determined by the Board of Directors, if an
optionee's employment or service with the Company terminates
because of total disability, his or her option may be
exercised at any time before the expiration date of the option
or before the date 12 months after the date of termination,
whichever is the shorter period, but only if and to the extent
the optionee was entitled to exercise the option at the date
of termination. The term "total disability" means a medically
determinable mental or physical impairment that is expected to
result in death or has lasted or is expected to last for a
continuous period of 12 months or more and that, in the
opinion of the Company and two independent physicians, causes
the optionee to be unable to perform his or her duties as an
employee, director, officer or consultant of the Employer and
unable to be engaged in any substantial gainful activity.
Total disability shall be deemed to have occurred on the first
day after the two independent physicians have furnished their
written opinion of total disability to the Company and the
Company has reached an opinion of total disability.
6.1-4(c). Termination Because of Death. Unless
otherwise determined by the Board of Directors, if an optionee
dies while employed by or providing service to the Company,
his or her option may be exercised at any time before the
expiration date of the option or before the date 12 months
after the date of death, whichever is the shorter period, but
only if and to the extent the optionee was entitled to
exercise the option at the date of death and only by the
person or persons to whom the optionee's rights under the
option shall pass by the optionee's will or by the laws of
descent and distribution of the state or country of domicile
at the time of death.
6.1-4(d). Amendment of Exercise Period Applicable to
Termination. The Board of Directors may at any time extend the
30-day and 12-month exercise periods any length of time not
longer than the original expiration date of the option. The
Board of Directors may at any time increase the portion of an
option that is exercisable, subject to terms and conditions
determined by the Board of Directors.
6.1-4(e). Failure to Exercise Option. To the extent
that the option of any deceased optionee or any optionee whose
employment or service terminates is not exercised within the
applicable period, all further rights to purchase shares
pursuant to the option shall cease and terminate.
6.1-4(f). Leave of Absence. Absence on leave approved
by the Employer or on account of illness or disability shall
not be deemed a termination or interruption of employment or
service. Unless otherwise determined by the Board of
Directors, vesting of options shall continue during a medical,
family or military leave of absence, whether paid or unpaid,
and vesting of options shall be suspended during any other
unpaid leave of absence.
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6.1-5. Purchase of Shares.
6.1-5(a). Notice of Exercise. Unless the Board of
Directors determines otherwise, shares may be acquired
pursuant to an option granted under the Plan only upon the
Company's receipt of written notice from the optionee of the
optionee's binding commitment to purchase shares, specifying
the number of shares the optionee desires to purchase under
the option and the date on which the optionee agrees to
complete the transaction, and, if required to comply with the
Securities Act of 1933, containing a representation that it is
the optionee's intention to acquire the shares for investment
and not with a view to distribution.
6.1-5(b). Payment. Unless the Board of Directors
determines otherwise, on or before the date specified for
completion of the purchase of shares pursuant to an option
exercise, the optionee must pay the Company the full purchase
price of those shares in cash or by check or, with the consent
of the Board of Directors, in whole or in part, in Common
Stock of the Company valued at fair market value, restricted
stock or other contingent awards denominated in either stock
or cash, promissory notes and other forms of consideration,
including services. Unless otherwise determined by the Board
of Directors, any Common Stock provided in payment of the
purchase price must have been previously acquired and held by
the optionee for at least six months. The fair market value of
Common Stock provided in payment of the purchase price shall
be the closing price of the Common Stock last reported before
the time payment in Common Stock is made or, if earlier,
committed to be made, if the Common Stock is publicly traded,
or another value of the Common Stock as specified by the Board
of Directors. No shares shall be issued until full payment for
the shares has been made, including all amounts owed for tax
withholding. With the consent of the Board of Directors, an
optionee may request the Company to apply automatically the
shares to be received upon the exercise of a portion of a
stock option (even though stock certificates have not yet been
issued) to satisfy the purchase price for additional portions
of the option.
6.1-5(c) . Tax Withholding. Each optionee who has
exercised an option shall, immediately upon notification of
the amount due, if any, pay to the Company in cash or by check
amounts necessary to satisfy any applicable federal, state and
local tax withholding requirements. If additional withholding
is or becomes required (as a result of exercise of an option
or as a result of disposition of shares acquired pursuant to
exercise of an option) beyond any amount deposited before
delivery of the certificates, the optionee shall pay such
amount, in cash or by check, to the Company on demand. If the
optionee fails to pay the amount demanded, the Company or the
Employer may withhold that amount from other amounts payable
to the optionee, including salary, subject to applicable law.
With the consent of the Board of Directors, an optionee may
satisfy this obligation, in whole or in part, by instructing
the Company to withhold from the shares to be issued upon
exercise or by delivering to the Company other shares of
Common Stock; provided, however, that the number of shares so
withheld or delivered shall not exceed the minimum amount
necessary to satisfy the required withholding obligation.
6.1-5(d) . Reduction of Reserved Shares. Upon the
exercise of an option, the number of shares reserved for
issuance under the Plan shall be reduced by the number of
shares issued upon exercise of the option (less the number of
any shares surrendered in payment for the exercise price or
withheld to satisfy withholding requirements).
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6.2. Incentive Stock Options. Incentive Stock Options shall be
subject to the following additional terms and conditions:
6.2-1. Limitation on Amount of Grants. If the aggregate fair
market value of stock (determined as of the date the option is granted)
for which Incentive Stock Options granted under this Plan (and any
other stock incentive plan of the Company or its parent or subsidiary
corporations, as defined in subsections 424(e) and 424(f) of the Code)
are exercisable for the first time by an employee during any calendar
year exceeds $100,000, the portion of the option or options not
exceeding $100,000, to the extent of whole shares, will be treated as
an Incentive Stock Option and the remaining portion of the option or
options will be treated as a Nonqualified Stock Option. The preceding
sentence will be applied by taking options into account in the order in
which they were granted. If, under the$100,000 limitation, a portion of
an option is treated as an Incentive Stock Option and the remaining
portion of the option is treated as a Nonqualified Stock Option, unless
the optionee designates otherwise at the time of exercise, the
optionee's exercise of all or a portion of the option will be treated
as the exercise of the Incentive Stock Option portion of the option to
the full extent permitted under the $100,000 limitation. If an optionee
exercises an option that is treated as in part an Incentive Stock
Option and in part a Nonqualified Stock Option, the Company will
designate the portion of the stock acquired pursuant to the exercise of
the Incentive Stock Option portion as Incentive Stock Option stock by
issuing a separate certificate for that portion of the stock and
identifying the certificate as Incentive Stock Option stock in its
stock records.
6.2-2. Limitations on Grants to 10 percent Shareholders. An
Incentive Stock Option may be granted under the Plan to an employee
possessing more than 10 percent of the total combined voting power of
all classes of stock of the Company or any parent or subsidiary (as
defined in subsections 424(e) and 424(f) of the Code) only if the
option price is at least 110 percent of the fair market value, as
described in Section 6.2-4, of the Common Stock subject to the option
on the date it is granted and the option by its terms is not
exercisable after the expiration of five years from the date it is
granted.
6.2-3. Duration of Options. Subject to Sections 6.1-2, 6.1-4
and 6.2-2, Incentive Stock Options granted under the Plan shall
continue in effect for the period fixed by the Board of Directors,
except that by its terms no Incentive Stock Option shall be exercisable
after the expiration of 10 years from the date it is granted.
6.2-4. Option Price. The option price per share shall be
determined by the Board of Directors at the time of grant. Except as
provided in Section 6.2-2, the option price shall not be less than 100
percent of the fair market value of the Common Stock covered by the
Incentive Stock Option at the date the option is granted. The fair
market value shall be the closing price of the Common Stock last
reported before the time the option is granted, if the stock is
publicly traded, or another value of the Common Stock as specified by
the Board of Directors.
6.2-5. Limitation on Time of Grant. No Incentive Stock Option
shall be granted on or after the tenth anniversary of the last action
by the Board of Directors adopting the Plan or approving an increase in
the number of shares available for issuance under the Plan, which
action was subsequently approved within 12 months by the shareholders.
6.2-6. Early Dispositions. If within two years after an
Incentive Stock Option is granted or within 12 months after an
Incentive Stock Option is exercised, the optionee sells or otherwise
disposes of Common Stock acquired on exercise of the Option, the
optionee shall within 30 days of the sale or disposition notify the
Company in writing of (i) the date of the sale or disposition, (ii) the
amount realized on the sale or disposition and (iii) the nature of the
disposition (e.g., sale, gift, etc.).
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6.3. Nonqualified Stock Options. Nonqualified Stock Options shall be
subject to the following terms and conditions, in addition to those set forth in
Section 6.1 above:
6.3-1. Option Price. The option price for Nonqualified Stock
Options shall be determined by the Board of Directors at the time of
grant and may be any amount determined by the Board of Directors.
6.3-2. Duration of Options. Nonqualified Stock Options granted
under the Plan shall continue in effect for the period fixed by the
Board of Directors.
7. Stock Bonuses. The Board of Directors may award shares under the
Plan as stock bonuses. Shares awarded as a bonus shall be subject to the terms,
conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability and forfeiture
of the shares awarded, together with any other restrictions determined by the
Board of Directors. The Board of Directors may require the recipient to sign an
agreement as a condition of the award, but may not require the recipient to pay
any monetary consideration other than amounts necessary to satisfy tax
withholding requirements. The agreement may contain any terms, conditions,
restrictions, representations and warranties required by the Board of Directors.
The certificates representing the shares awarded shall bear any legends required
by the Board of Directors. The Company may require any recipient of a stock
bonus to pay to the Company in cash or by check upon demand amounts necessary to
satisfy any applicable federal, state or local tax withholding requirements. If
the recipient fails to pay the amount demanded, the Company or the Employer may
withhold that amount from other amounts payable to the recipient, including
salary, subject to applicable law. With the consent of the Board of Directors, a
recipient may satisfy this obligation, in whole or in part, by instructing the
Company to withhold from any shares to be issued or by delivering to the Company
other shares of Common Stock; provided, however, that the number of shares so
withheld or delivered shall not exceed the minimum amount necessary to satisfy
the required withholding obligation. Upon the issuance of a stock bonus, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued, less the number of shares withheld or delivered to
satisfy withholding obligations.
8. Restricted Stock. The Board of Directors may issue shares under the
Plan for any consideration (including promissory notes and services) determined
by the Board of Directors. Shares issued under the Plan shall be subject to the
terms, conditions and restrictions determined by the Board of Directors. The
restrictions may include restrictions concerning transferability, repurchase by
the Company and forfeiture of the shares issued, together with any other
restrictions determined by the Board of Directors. All Common Stock issued
pursuant to this Section 8 shall be subject to a purchase agreement, which shall
be executed by the Company and the prospective purchaser of the shares before
the delivery of certificates representing the shares to the purchaser. The
purchase agreement may contain any terms, conditions, restrictions,
representations and warranties required by the Board of Directors. The
certificates representing the shares shall bear any legends required by the
Board of Directors. The Company may require any purchaser of restricted stock to
pay to the Company in cash or by check upon demand amounts necessary to satisfy
any applicable federal, state or local tax withholding requirements. If the
purchaser fails to pay the amount demanded, the Company or the Employer may
withhold that amount from other amounts payable to the purchaser, including
salary, subject to applicable law. With the consent of the Board of Directors, a
purchaser may satisfy this obligation, in whole or in part, by instructing the
Company to withhold from any shares to be issued or by delivering to the Company
other shares of Common Stock; provided, however, that the number of shares so
withheld or delivered shall not exceed the minimum amount necessary to satisfy
the required withholding obligation. Upon the issuance of restricted stock, the
number of shares reserved for issuance under the Plan shall be reduced by the
number of shares issued, less the number of shares withheld or delivered to
satisfy withholding obligations.
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9. Performance-Based Awards. The Board of Directors may grant awards
intended to qualify as qualified performance-based compensation under Section
162(m) of the Code and the regulations thereunder ("Performance-Based Awards").
Performance-Based Awards shall be denominated at the time of grant either in
Common Stock ("Stock Performance Awards") or in dollar amounts ("Dollar
Performance Awards"). Payment under a Stock Performance Award or a Dollar
Performance Award shall be made, at the discretion of the Board of Directors, in
Common Stock ("Performance Shares"), or in cash or in any combination thereof.
Performance-Based Awards shall be subject to the following terms and conditions:
9.1. Award Period. The Board of Directors shall determine the period of
time for which a Performance-Based Award is made (the "Award Period").
9.2. Performance Goals and Payment. The Board of Directors shall
establish in writing objectives ("Performance Goals") that must be met by the
Company or any subsidiary, division or other unit of the Company ("Business
Unit") during the Award Period as a condition to payment being made under the
Performance-Based Award. The Performance Goals for each award shall be one or
more targeted levels of performance with respect to one or more of the following
objective measures with respect to the Company or any Business Unit: earnings,
earnings per share, stock price increase, total shareholder return (stock price
increase plus dividends), return on equity, return on assets, return on capital,
economic value added, revenues, operating income, inventories, inventory turns,
cash flows or any of the foregoing before the effect of acquisitions,
divestitures, accounting changes, and restructuring and special charges
(determined according to criteria established by the Board of Directors). The
Board of Directors shall also establish the number of Performance Shares or the
amount of cash payment to be made under a Performance-Based Award if the
Performance Goals are met or exceeded, including the fixing of a maximum
payment. The Board of Directors may establish other restrictions to payment
under a Performance-Based Award, such as a continued employment requirement, in
addition to satisfaction of the Performance Goals. Some or all of the
Performance Shares may be issued at the time of the award as restricted shares
subject to forfeiture in whole or in part if Performance Goals or, if
applicable, other restrictions are not satisfied.
9.3. Computation of Payment. During or after an Award Period, the
performance of the Company or Business Unit, as applicable, during the period
shall be measured against the Performance Goals. If the Performance Goals are
not met, no payment shall be made under a Performance-Based Award. If the
Performance Goals are met or exceeded, the Board of Directors shall certify that
fact in writing and certify the number of Performance Shares earned or the
amount of cash payment to be made under the terms of the Performance-Based
Award.
9.4. Tax Withholding. Each participant who has received Performance
Shares shall, upon notification of the amount due, pay to the Company in cash or
by check amounts necessary to satisfy any applicable federal, state and local
tax withholding requirements. If the participant fails to pay the amount
demanded, the Company or the Employer may withhold that amount from other
amounts payable to the participant, including salary, subject to applicable law.
With the consent of the Board of Directors, a participant may satisfy this
obligation, in whole or in part, by instructing the Company to withhold from any
shares to be issued or by delivering to the Company other shares of Common
Stock; provided, however, that the number of shares so delivered or withheld
shall not exceed the minimum amount necessary to satisfy the required
withholding obligation.
9.5. Effect on Shares Available. The payment of a Performance-Based
Award in cash shall not reduce the number of shares of Common Stock reserved for
issuance under the Plan. The number of shares of Common Stock reserved for
issuance under the Plan shall be reduced by the number of shares issued upon
payment of an award, less the number of shares delivered or withheld to satisfy
withholding obligations.
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10. Changes in Capital Structure.
10.1. Stock Splits, Stock Dividends. If the outstanding Common Stock of
the Company is hereafter increased or decreased or changed into or exchanged for
a different number or kind of shares or other securities of the Company by
reason of any stock split, combination of shares, dividend payable in shares,
recapitalization or reclassification, appropriate adjustment shall be made by
the Board of Directors in the number and kind of shares available for grants
under the Plan and in all other share amounts set forth in the Plan. In
addition, the Board of Directors shall make appropriate adjustment in the number
and kind of shares as to which outstanding options, or portions thereof then
unexercised, shall be exercisable, so that the optionee's proportionate interest
before and after the occurrence of the event is maintained. Notwithstanding the
foregoing, the Board of Directors shall have no obligation to effect any
adjustment that would or might result in the issuance of fractional shares, and
any fractional shares resulting from any adjustment may be disregarded or
provided for in any manner determined by the Board of Directors. Any such
adjustments made by the Board of Directors shall be conclusive.
10.2. Mergers, Reorganizations, Etc. In the event of a merger,
consolidation, plan of exchange, acquisition of property or stock, split-up,
split-off, spin-off, reorganization or liquidation to which the Company is a
party or any sale, lease, exchange or other transfer (in one transaction or a
series of related transactions) of all, or substantially all, of the assets of
the Company (each, a "Transaction"), the Board of Directors shall, in its sole
discretion and to the extent possible under the structure of the Transaction,
select one of the following alternatives for treating outstanding options under
the Plan:
10.2-1. Outstanding options shall remain in effect
according to their terms.
10.2-2. Outstanding options shall be converted into options to
purchase stock in one or more of the corporations, including the
Company, that are the surviving or acquiring corporations in the
Transaction. The amount, type of securities subject thereto and
exercise price of the converted options shall be determined by the
Board of Directors of the Company, taking into account the relative
values of the companies involved in the Transaction and the exchange
rate, if any, used in determining shares of the surviving
corporation(s) to be held by holders of shares of the Company following
the Transaction. Unless otherwise determined by the Board of Directors,
the converted options shall be vested only to the extent that the
vesting requirements relating to options granted hereunder have been
satisfied.
10.2-3. The Board of Directors shall provide a period of 30
days or less before the completion of the Transaction during which
outstanding options may be exercised to the extent then exercisable,
and upon the expiration of that period, all unexercised options shall
immediately terminate. The Board of Directors may, in its sole
discretion, accelerate the exercisability of options so that they are
exercisable in full during that period.
10.3. Dissolution of the Company. In the event of the dissolution of
the Company, options shall be treated in accordance with Section 10.2-3.
10.4. Rights Issued by Another Corporation. The Board of Directors may
also grant options and stock bonuses and Performance-Based Awards and issue
restricted stock under the Plan with terms, conditions and provisions that vary
from those specified in the Plan, provided that any such awards are granted in
substitution for, or in connection with the assumption of, existing options,
stock bonuses, Performance-Based Awards and restricted stock granted, awarded or
issued by another corporation and assumed or otherwise agreed to be provided for
by the Company pursuant to or by reason of a Transaction.
11. Amendment of the Plan or Previous Awards. The Board of Directors
may at any time modify or amend in any respect the Plan or any award already
granted. Except as provided in
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Section 10, however, no change in an award already granted shall be made without
the written consent of the holder of the award if the change would adversely
affect the holder.
12. Approvals. The Company's obligations under the Plan are subject to
the approval of state and federal authorities or agencies with jurisdiction in
the matter. The Company will use its best efforts to take steps required by
state or federal law or applicable regulations, including rules and regulations
of the Securities and Exchange Commission and any stock exchange on which the
Company's shares may then be listed, in connection with the grants under the
Plan. The foregoing notwithstanding, the Company shall not be obligated to issue
or deliver Common Stock under the Plan if such issuance or delivery would
violate state or federal securities laws.
13. Employment and Service Rights. Nothing in the Plan or any award
pursuant to the Plan shall (i) confer upon any employee any right to be
continued in the employment of an Employer or interfere in any way with the
Employer's right to terminate the employee's employment at will at any time, for
any reason, with or without cause, or to decrease the employee's compensation or
benefits, or (ii) confer upon any person engaged by an Employer any right to be
retained or employed by the Employer or to the continuation, extension, renewal
or modification of any compensation, contract or arrangement with or by the
Employer.
14. Rights as a Shareholder. The recipient of any award under the Plan
shall have no rights as a shareholder with respect to any shares of Common Stock
until the date the recipient becomes the holder of record of those shares.
Except as otherwise expressly provided in the Plan, no adjustment shall be made
for dividends or other rights for which the record date occurs before the date
the recipient becomes the holder of record.
Adopted: April 8, 2004
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