HEICO CORPORATION
EXHIBIT 10.10
TO THE FORM 10-K
FOR THE FISCAL YEAR ENDED
OCTOBER 31, 2002
SECURITIES AND EXCHANGE COMMISSION FILE NUMBER 1-4604
Exhibit 10.10
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HEICO CORPORATION
2002 STOCK OPTION PLAN
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1. Purpose. The purpose of this Plan is to advance the interests of HEICO
Corporation, a Florida corporation (the "Company"), and its Related Entities by
providing an additional incentive to attract and retain qualified and competent
persons who provide services to the Company and its Related Entities, and upon
whose efforts and judgment the success of the Company and its Related Entities
is largely dependent, through the encouragement of stock ownership in the
Company by such persons.
2. Definitions. As used herein, the following terms shall have the meanings
indicated:
(a) "Board" shall mean the Board of Directors of the Company.
(b) "Cause" shall mean a "Cause" as defined in the Optionee's employment
agreement with the Company or a Related Entity or in the absence of an
employment agreement, willful misconduct or gross negligence.
(c) "Class A Common Stock" shall mean the shares of Class A Common Stock
of the Company, par value $.01.
(d) "Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
(e) "Committee" shall mean the committee appointed by the Board pursuant
to Section 13(a) hereof, or, if such committee is not appointed, the Board.
(f) "Common Stock" shall mean the shares of Common Stock of the Company,
par value $.01.
(g) "Company" shall mean HEICO Corporation, a Florida corporation.
(h) "Consultant" shall mean any person (other than an Employee or a
Director, solely with respect to rendering services in such person's capacity as
a Director) who is engaged by the Company or any Related Entity to render
consulting or advisory services to the Company or such Related Entity.
(i) "Continuous Service" shall mean the continuous service to the
Company or Related Entity, without interruption or termination, in any capacity
of Employee, Director or Consultant. Continuous Service shall not be considered
interrupted in the case of (i) any approved leave of absence, (ii) transfers
among the Company, any Related Entity, or any successor, in any capacity of
Employee, Director or Consultant, or (iii) any change in status as long as the
individual remains in the service of the Company or a Related Entity in any
capacity of Employee, Director or Consultant (except as otherwise provided in
the Option Agreement). An approved leave of absence shall include sick leave,
military leave, or any other authorized personal leave.
(j) "Director" shall mean a member of the Board or the board of
directors of any Related Entity.
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(k) "Effective Date" shall mean March 19, 2002.
(l) "Employee" shall mean any person, including an Officer or Director,
who is an employee of the Company or any Related Entity. The payment of a
Director's normal compensation and fee (as applicable to all Directors or
Committee members, as the case may be) by the Company or a Related Entity shall
not be sufficient to constitute "employment" by the Company.
(m) "Fair Market Value" of a Share on any date of reference shall mean
the "Closing Price" (as defined below) of the Shares on the trading day
immediately preceding the date of reference, unless the Committee or the Board
in its sole discretion shall determine otherwise in a fair and uniform manner.
For the purpose of determining Fair Market Value, the "Closing Price" of the
shares on any business day shall be (i) if the Shares are listed or admitted for
trading on any United States national securities exchange, or if actual
transactions are otherwise reported on a consolidated transaction reporting
system, the last reported sale price of the Shares on such exchange or reporting
system, as reported in any newspaper of general circulation, (ii) if the Shares
are quoted on the National Association of Securities Dealers Automated
Quotations System ("NASDAQ"), or any similar system of automated dissemination
of quotations of securities prices in common use, the last reported sale price
of the Shares on such system or, if sales prices are not reported, the mean
between the closing high bid and low asked quotations for such day of the Shares
on such system, as reported in any newspaper of general circulation or (iii) if
neither clause (i) or (ii) is applicable, the mean between the high bid and low
asked quotations for the Shares as reported by the National Quotation Bureau,
Incorporated if at least two securities dealers have inserted both bid and asked
quotations for the Shares on at least five of the ten preceding days. If neither
(i), (ii), or (iii) above is applicable, then Fair Market Value shall be
determined by the Committee or the Board in a fair and uniform manner.
(n) "Incentive Stock Option" shall mean an incentive stock option as
defined in Section 422 of the Code.
(o) "Non-Qualified Stock Option" shall mean an Option that is not an
Incentive Stock Option.
(p) "Officer" shall mean the Company's Chairman of the Board, President,
Chief Executive Officer, principal financial officer, principal accounting
officer, any vice-president of the Company in charge of a principal business
unit, division or function (such as sales, administration or finance), any other
officer who performs a policy-making function, or any other person who performs
similar policy-making functions for the Company. Officers of Subsidiaries shall
be deemed Officers of the Company if they perform such policy-making functions
for the Company. As used in this paragraph, the phrase "policy-making function"
does not include policy-making functions that are not significant. If pursuant
to Item 401(b) of Regulation S-K (17 C.F.R. ss. 229.401(b)) the Company
identifies a person as an "executive officer," the person so identified shall be
deemed an "Officer" even though such person may not otherwise be an "Officer"
pursuant to the foregoing provisions of this paragraph.
(q) "Option" (when capitalized) shall mean any option granted under this
Plan.
(r) "Option Agreement" shall mean the agreement between the Company and
the Optionee for the grant of an option.
(s) "Optionee" shall mean a person to whom a stock option is granted
under this Plan or any person who succeeds to the rights of such person under
this Plan by reason of the death of such person.
(t) "Outside Director" shall mean a member of the Board who qualifies as
an "outside director" under Section 162(m) of the Code and the regulations
thereunder and as a "Non-Employee Director" under Rule 16b-3 promulgated under
the Securities Exchange Act.
(u) "Parent" shall mean any corporation (other than the Company),
whether now or hereafter existing, in an unbroken chain of corporations ending
with the Company, if each of the corporations in the chain (other than the
Company) owns stock possessing 50% or more of the combined voting power of all
classes of stock in one of the other corporations in the chain.
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(v) "Plan" shall mean this 2002 Stock Option Plan for the Company.
(w) "Related Entity" shall mean any Parent or Subsidiary, and any
business, corporation, partnership, limited liability company or other entity in
which the Company, a Parent or a Subsidiary holds a substantial ownership
interest, directly or indirectly.
(x) "Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(y) "Share" or "Shares" shall mean a share of Common Stock or Class A
Common Stock.
(z) "Subsidiary" shall mean any corporation (other than the Company),
whether now or hereafter existing, in an unbroken chain of corporations
beginning with the Company, if each of the corporations other that the last
corporation in the unbroken chain owns stock possessing 50% or more of the total
combined voting power of all classes of stock in one of the other corporations
in such chain.
3. Shares Available for Option Grants. The Committee or the Board may grant
to Optionees from time to time Options to purchase an aggregate number of Shares
in an amount up to 520,000 Shares from the Company's authorized and unissued
Shares. The Options granted pursuant to this Plan may be with respect to Common
Stock and/or Class A Common Stock, in such proportions as shall be determined by
the Board or the Committee in its sole discretion. The aggregate number of
Shares available for the grant of Incentive Stock Options shall be 520,000
Shares. If any Option granted under the Plan shall terminate, expire, or be
canceled or surrendered as to any Shares, new Options may thereafter be granted
covering such Shares.
4. Incentive and Non-Qualified Options.
(a) An Option granted hereunder shall be either an Incentive Stock
Option or a Non-Qualified Stock Option as determined by the Committee or the
Board at the time of grant of the Option and shall clearly state whether it is
an Incentive Stock Option or a Non-Qualified Stock Option. All Incentive Stock
Options shall be granted within 10 years from the Effective Date. Incentive
Stock Options may not be granted to any person who is not an Employee of the
Company, the Parent or a Subsidiary.
(b) Options otherwise qualifying as Incentive Stock Options hereunder
will not be treated as Incentive Stock Options to the extent that the aggregate
fair market value (determined at the time the Option is granted) of the Shares,
with respect to which Options meeting the requirements of Section 422(b) of the
Code are exercisable for the first time by any individual during any calendar
year (under all plans of the Company and its Parent and Subsidiaries), exceeds
$100,000.
5. Conditions for Grant of Options.
(a) Each Option shall be evidenced by an Option Agreement that may
contain any term deemed necessary or desirable by the Committee or the Board,
provided such terms are not inconsistent with this Plan or any applicable law.
Optionees shall be those persons who are selected by the Committee or the Board
from the class of all Employees, Directors and Consultants of the Company or any
Related Entity.
(b) In granting Options, the Committee or the Board shall take into
consideration the contribution the person has made to the success of the Company
or any Related Entities and such other factors as the Committee or the Board
shall determine. The Committee or the Board shall also have the authority to
consult with and receive recommendations from officers and other personnel of
the Company and its Related Entities with regard to these matters. The Committee
or the Board may from time to time in granting Options under the Plan prescribe
such other terms and conditions concerning such Options as it deems appropriate,
including, without limitation, (i) prescribing the date or dates on which the
Option becomes exercisable, (ii) providing that the Option rights accrue or
become exercisable in installments over a period of years, or upon the
attainment of stated goals or both, (iii) prescribing pay back to the Company of
gains realized on the exercise of Options and forfeiture or expiration of
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Option rights, or (iv) relating an Option to the Continuous Service or continued
employment of the Optionee for a specified period of time, provided that such
terms and conditions are not more favorable to an Optionee than those expressly
permitted herein.
(c) The Options granted to Optionees under this Plan shall be in
addition to regular salaries, pension, life insurance or other benefits related
to their employment or Continuous Service with the Company or its Related
Entities. Neither the Plan nor any Option granted under the Plan shall confer
upon any person any right to employment or continuance of employment or
Continuous Service by the Company or its Related Entities.
(d) The Committee or the Board shall have the discretion to grant
Options that are exercisable for unvested Shares. Should the Optionee's
Continuous Service cease while holding such unvested Shares, the Company shall
have the right to repurchase, at the exercise price paid per share, any or all
of those unvested Shares. The terms upon which such repurchase right shall be
exercisable (including the period and procedure for exercise and the appropriate
vesting schedule for the purchased Shares) shall be established by the Committee
or the Board and set forth in the Option Agreement for the relevant Option.
(e) Notwithstanding any other provision of this Plan, an Incentive Stock
Option shall not be granted to any person owning directly or indirectly (through
attribution under Section 424(d) of the Code) at the date of grant, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Company (or of any Parent or Subsidiary of the Company at the date
of grant) unless the option price of such Option is at least 110% of the Fair
Market Value of the Shares subject to such Option on the date the Option is
granted, and such Option by its terms is not exercisable after the expiration of
five years from the date such Option is granted.
(f) Subject to the provision of Section 5(g) below, notwithstanding any
other provision of this Plan, and in addition to any other requirements of this
Plan, the aggregate number of Options granted to any one Optionee may not exceed
250,000 per fiscal year of the Company, subject to adjustment as provided in
Section 10 hereof. The aggregate number of Options granted to any one Optionee
may be increased from 250,000 per fiscal year to 400,000 (subject to adjustment
as provided in Section 10 hereof) as an initial one-time grant available only in
the fiscal year of the Company in which an Optionee is first employed by the
Company or one of its Related Entities.
(g) Upon the exercise of an option granted under the Plan or under any
other stock plan of the Company which may be designated by the Committee or the
Board from time to time, the Optionee, at the discretion of the Committee or the
Board, may receive a reload option on the terms, conditions and limitations
determined by the Committee or the Board, from time to time. A reload option
gives the Optionee the right to purchase a number of Shares equal to the number
of Shares surrendered to pay the exercise price and/or used to pay the
withholding taxes applicable to an Option exercise. Reload options do not
increase the net equity position of an Optionee. Their purpose is to facilitate
continued stock ownership in the Company by Optionees.
6. Option Price. The option price per Share of any Option shall be any
price determined by the Committee or the Board but shall not be less than the
par value per Share; provided, however, that in no event shall the option price
per Share of any Incentive Stock Option be less than the Fair Market Value of
the Shares underlying such Option on the date such Option is granted.
7. Exercise of Options.
(a) An Option shall be deemed exercised when (i) the Company has
received written notice of such exercise in accordance with the terms of the
Option, (ii) full payment of the aggregate option price of the Shares as to
which the Option is exercised has been made, and (iii) arrangements that are
satisfactory to the Committee or the Board in its sole discretion have been made
for the Optionee's payment to the Company of the amount that is necessary for
the Company or Related Entity employing the Optionee to withhold in accordance
with applicable Federal or state tax withholding requirements.
(b) The consideration to be paid for the Shares to be issued upon
exercise of an Option, as
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well as the method of payment of the option price and of any withholding and
employment taxes applicable thereto, shall be determined by the Committee or the
Board and may in the discretion of the Committee or the Board consist of: (1)
cash, (2) certified or official bank check, (3) money order, (4) Shares that
have been held by the Optionee for at least six (6) months (or such other Shares
as the Company determines will not cause the Company to recognize for financial
accounting purposes a charge for compensation expense), (5) the withholding of
Shares issuable upon exercise of the Option, (6) pursuant to a "cashless
exercise" procedure, by delivery of a properly executed exercise notice together
with such other documentation, and subject to such guidelines, as the Board or
the Committee shall require to effect an exercise of the Option and delivery to
the Company by a licensed broker acceptable to the Company of proceeds from the
sale of Shares or a margin loan sufficient to pay the exercise price and any
applicable income or employment taxes, or (7) such other consideration as the
Committee or the Board deems appropriate, or by a combination of the above. In
the case of an Incentive Stock Option, the permissible methods of payment shall
be specified at the time the Option is granted. The Committee or the Board in
its sole discretion may accept a personal check in full or partial payment of
any Shares. If the exercise price is paid, and/or the Optionee's tax withholding
obligation is satisfied, in whole or in part with Shares, or through the
withholding of Shares issuable upon exercise of the Option, the value of the
Shares surrendered or withheld shall be their Fair Market Value on the date the
Option is exercised.
(c) The Committee or the Board in its sole discretion may, on an
individual basis or pursuant to a general program established in connection with
this Plan, cause the Company to lend money to an Optionee, guarantee a loan to
an Optionee, or otherwise assist an Optionee to obtain the cash necessary to
exercise all or a portion of an Option granted hereunder or to pay any tax
liability of the Optionee attributable to such exercise. If the exercise price
is paid in whole or part with the Optionee's promissory note, such note shall
(i) provide for full recourse to the maker, (ii) be collateralized by the pledge
of the Shares that the Optionee purchases upon exercise of the Option, (iii)
bear interest at the prime rate of the Company's principal lender, and (iv)
contain such other terms as the Committee or the Board in its sole discretion
shall reasonably require.
(d) No Optionee shall be deemed to be a holder of any Shares subject to
an Option unless and until a stock certificate or certificates for those Shares
are issued to that person(s) under the terms of this Plan. No adjustment shall
be made for dividends (ordinary or extraordinary, whether in cash, securities or
other property) or distributions or other rights for which the record date is
prior to the date the stock certificate is issued, except as expressly provided
in Section 10 hereof.
8. Exercisability of Options. Any Option shall become exercisable in such
amounts, at such intervals and upon such terms and/or conditions as the
Committee or the Board shall provide in the Option Agreement for that Option,
except as otherwise provided in this Section 8:
(a) The expiration date of an Option Agreement shall be determined by
the Committee or the Board at the time of grant, but in no event shall an Option
be exercisable after the expiration of 10 years from the date of grant of the
Option.
(b) Unless otherwise provided in any Option, each outstanding Option
shall not become immediately fully exercisable in the event of a "Change in
Control" but shall become fully exercisable in the event that the Committee or
the Board exercises its discretion to provide a cancellation notice with respect
to the Option pursuant to Section 9(b) hereof. For this purpose, the term
"Change in Control" shall mean:
(i) Approval by the shareholders of the Company of a reorganization,
merger, consolidation or other form of corporate transaction or series of
transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately prior to such reorganization, merger or
consolidation or other transaction do not, immediately thereafter, own more than
50% of the combined voting power entitled to vote generally in the election of
directors of the reorganized, merged or consolidated company's then outstanding
voting securities, in substantially the same proportions as their ownership
immediately prior to such reorganization, merger, consolidation or other
transaction, or a liquidation or dissolution of the Company or the sale of all
or substantially all of the assets of the Company (unless such reorganization,
merger, consolidation or other corporate transaction, liquidation, dissolution
or sale is subsequently abandoned); or
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(ii) Individuals who, as of the date on which the Option is granted,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director
subsequent to the date on which the Option was granted whose election, or
nomination for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent Board (other
than an election or nomination of an individual whose initial assumption of
office is in connection with an actual or threatened election contest relating
to the election of the Directors of the Company) shall be, for purposes of this
Agreement, considered as though such person were a member of the Incumbent
Board; or
(iii) The acquisition (other than from the Company) by any person,
entity or "group", within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act, of beneficial ownership (within the meaning of Rule
13-d promulgated under the Securities Exchange Act) of 30% of either the then
outstanding Shares of the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election of
directors (hereinafter referred to as the ownership of a "Controlling Interest")
excluding, for this purpose, any acquisitions by (1) the Company or its
Subsidiaries, (2) any person, entity or "group" that as of the date on which the
Option is granted owns beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act) of a Controlling Interest, (3)
any employee benefit plan of the Company or its Subsidiaries or (4) the
Mendelson Group. For this purpose, the term "Mendelson Group" shall mean Laurans
A. Mendelson and his immediate family, which shall include his spouse, parents,
descendants and spouses of descendants. The Mendelson Group shall also include
trusts, partnerships, limited liability companies, corporations, or other
entities in which a member or members of the Mendelson Group own, directly or
indirectly, more than fifty percent (50%) of the voting power or value.
(c) The Committee or the Board may in its sole discretion, accelerate
the date on which any Option may be exercised and may accelerate the vesting of
any Shares subject to any Option or previously acquired by the exercise of any
Option.
9. Termination of Option Period.
(a) Unless otherwise provided in any Option Agreement, the unexercised
portion of any Option shall automatically and without notice terminate and
become null and void at the time of the earliest to occur of the following:
(i) three months after the date on which the Optionee's Continuous
Service is terminated other than by reason of (A) "Cause", (B) a mental or
physical disability (within the meaning of Internal Revenue Code Section 22(e))
of the Optionee as determined by a medical doctor satisfactory to the Committee
or the Board, or (C) death of the Optionee;
(ii) immediately upon the termination of the Optionee's Continuous
Service for Cause;
(iii) twelve months after the date on which the Optionee's
Continuous Service is terminated by reason of a mental or physical disability
(within the meaning of Section 22(e) of the Code) as determined by a medical
doctor satisfactory to the Committee or the Board;
(iv) (A) twelve months after the date of termination of the
Optionee's Continuous Service by reason of the death of the Optionee, or, if
later, (B) three months after the date on which the Optionee shall die if such
death shall occur during the one year period specified in Subsection 9(a)(iii)
hereof.
(b) To the extent not previously exercised, (i) each Option shall
terminate immediately in the event of (1) the liquidation or dissolution of the
Company, or (2) any reorganization, merger, consolidation or other form of
corporate transaction (each a "Corporate Transaction") in which either the
Company does not survive or the Shares are exchanged for or converted into
securities issued by another entity, unless the successor or acquiring entity,
or an affiliate thereof, assumes the Option or substitutes an equivalent option
or right pursuant to Section
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10(c) hereof, and (ii) the Committee or the Board in its sole discretion may by
written notice ("cancellation notice") cancel, effective upon the consummation
of any Corporate Transaction, any Option that remains unexercised and would
otherwise not terminate on the effective date of that transaction. The Committee
or the Board shall give written notice of any proposed transaction referred to
in this Section 9(b) a reasonable period of time prior to the closing date for
such transaction (which notice may be given either before or after approval of
such transaction), in order that Optionees may have a reasonable period of time
prior to the closing date of such transaction within which to exercise any
Options that then are exercisable (including any Options that may become
exercisable upon the closing date of such transaction). An Optionee may
condition his exercise of any Option upon the consummation of a transaction
referred to in this Section 9(b).
10. Adjustment of Shares.
(a) If at any time while the Plan is in effect or unexercised Options
are outstanding, there shall be any increase or decrease in the number of issued
and outstanding Shares through the declaration of a stock dividend or through
any recapitalization resulting in a stock split-up, combination or exchange of
Shares, then and in that event, the Board or the Committee shall make:
(i) appropriate adjustment in the maximum number of Shares available
for grant under the Plan, or available for grant to any person under the Plan,
so that the same percentage of the Company's issued and outstanding Shares shall
continue to be subject to being so optioned; and
(ii) any adjustments it deems appropriate in the number of Shares
and the exercise price per Share thereof then subject to any outstanding Option,
so that the same percentage of the Company's issued and outstanding Shares shall
remain subject to purchase at the same aggregate option price.
(b) Unless otherwise provided in any Option Agreement, the Board or the
Committee may change the terms of Options outstanding under this Plan, with
respect to the option price or the number of Shares subject to the Options, or
both, when, in the sole discretion of the Board or the Committee, such
adjustments become appropriate so as to preserve benefits under the Plan.
(c) In the event of a proposed sale of all or substantially all of the
Company's assets or any reorganization, merger, consolidation or other form of
corporate transaction in which the Company does not survive, or in which the
Shares are exchanged for or converted into securities issued by another entity,
then the successor or acquiring entity or an affiliate thereof may, with the
consent of the Committee or the Board, assume each outstanding Option or
substitute an equivalent option or right. If the successor or acquiring entity,
or an affiliate thereof, does not cause such an assumption or substitution to
occur, or the Committee or the Board does not consent to such an assumption or
substitution, then each Option shall terminate pursuant to Section 9(b) hereof
upon consummation of the sale, merger, consolidation or other corporate
transaction.
(d) Except as otherwise expressly provided herein, the issuance by the
Company of Shares of its capital stock of any class, or securities convertible
into Shares of capital stock of any class, either in connection with a direct
sale or upon the exercise of rights or warrants to subscribe therefore, or upon
conversion of Shares or obligations of the Company convertible into such Shares
or other securities, shall not affect, and no adjustment by reason thereof shall
be made to, the number of or exercise price for Shares then subject to
outstanding Options granted under the Plan.
(e) Without limiting the generality of the foregoing, the existence of
outstanding Options granted under the Plan shall not affect in any manner the
right or power of the Company to make, authorize or consummate (i) any or all
adjustments, recapitalizations, reorganizations or other changes in the capital
structure or business of the Company or any Related Entity; (ii) any merger or
consolidation of the Company or any Related Entity; (iii) any issue by the
Company or any Related Entity of debt securities, or preferred or preference
stock that would rank above the Shares subject to outstanding Options; (iv) the
dissolution or liquidation of the Company or any Related Entity; (v) any sale,
transfer or assignment of all or any part of the assets or business of the
Company or any Related Entity; or (vi) any other corporate act or proceeding,
whether of a similar character or otherwise.
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11. Transferability of Options and Shares.
(a) No Incentive Stock Option, and unless the prior written consent of
the Committee or the Board is obtained (which consent may be withheld for any
reason) and the transaction does not violate the requirements of Rule 16b-3
promulgated under the Securities Exchange Act no Non-Qualified Stock Option,
shall be subject to alienation, assignment, pledge, charge or other transfer
other than by the Optionee by will or the laws of descent and distribution, and
any attempt to make any such prohibited transfer shall be void. Each Option
shall be exercisable during the Optionee's lifetime only by the Optionee, or in
the case of a Non-Qualified Stock Option that has been assigned or transferred
with the prior written consent of the Committee or the Board, only by the
permitted assignee.
(b) No Shares acquired by an Officer or Director pursuant to the
exercise of an Option may be sold, assigned, pledged or otherwise transferred
prior to the expiration of the six-month period following the date on which the
Option was granted, unless the transaction does not violate the requirements of
Rule 16b-3 promulgated under the Securities Exchange Act.
12. Issuance of Shares.
(a) Notwithstanding any other provision of this Plan, the Company shall
not be obligated to issue any Shares unless it is advised by counsel of its
selection that it may do so without violation of the applicable Federal and
State laws pertaining to the issuance of securities, and may require any stock
so issued to bear a legend, may give its transfer agent instructions, and may
take such other steps, as in its judgment are reasonably required to prevent any
such violation.
(b) As a condition to any sale or issuance of Shares upon exercise of
any Option, the Committee or the Board may require such agreements or
undertakings as the Committee or the Board may deem necessary or advisable to
facilitate compliance with any applicable law or regulation including, but not
limited to, the following:
(i) a representation and warranty by the Optionee to the Company, at
the time any Option is exercised, that he is acquiring the Shares to be issued
to him for investment and not with a view to, or for sale in connection with,
the distribution of any such Shares; and
(ii) a representation, warranty and/or agreement to be bound by any
legends endorsed upon the certificate(s) for the Shares that are, in the opinion
of the Committee or the Board, necessary or appropriate to facilitate compliance
with the provisions of any securities laws deemed by the Committee or the Board
to be applicable to the issuance and transfer of those Shares.
13. Administration of the Plan.
(a) The Plan shall be administered by the Board or, at the discretion of
the Board, by a committee appointed by the Board (the "Committee") which shall
be composed of two or more Directors. The membership of the Committee shall be
constituted so as to comply at all times with the then applicable requirements
for Outside Directors of Rule 16b-3 promulgated under the Securities Exchange
Act and Section 162(m) of the Code. The Committee shall serve at the pleasure of
the Board and shall have the powers designated herein and such other powers as
the Board may from time to time confer upon it.
(b) Any and all decisions or determinations of the Committee shall be
made either (i) by a majority vote of the members of the Committee at a meeting
or (ii) without a meeting by the unanimous written approval of the members of
the Committee.
(c) The Committee or the Board, from time to time, may adopt rules and
regulations for carrying out the purposes of the Plan.
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(d) The determinations of the Committee, and its interpretation and
construction of any provision of the Plan or any Option Agreement, shall be
final and binding on all persons, unless determined otherwise by the Board. The
determinations of the Board, and its interpretation and construction of any
provision of the Plan or any Option Agreement, shall be final and binding on all
persons, including the Committee. In the event that any action taken by the
Board conflicts with any action taken by the Committee, the Board action shall
control.
14. Withholding or Deduction for Taxes. If at any time specified herein for
the making of any issuance or delivery of any Option or Shares to any Optionee,
any law or regulation of any governmental authority having jurisdiction in the
premises shall require the Company or a Related Entity to withhold, or to make
any deduction for, any taxes or to take any other action in connection with the
issuance or delivery then to be made, the issuance or delivery shall be deferred
until the withholding or deduction shall have been provided for by the Optionee
or beneficiary, or other appropriate action shall have been taken.
15. Interpretation.
(a) As it is the intent of the Company that the Plan shall comply in all
respects with Rule 16b-3 promulgated under the Securities Exchange Act ("Rule
16b-3"), any ambiguities or inconsistencies in construction of the Plan shall be
interpreted to give effect to such intention, and if any provision of the Plan
is found not to be in compliance with Rule 16b-3, such provision shall be deemed
null and void to the extent required to permit the Plan to comply with Rule
16b-3. The Committee or the Board may from time to time adopt rules and
regulations under, and amend, the Plan in furtherance of the intent of the
foregoing.
(b) The Plan and any Option Agreements entered into pursuant to the Plan
shall be administered and interpreted so that all Incentive Stock Options
granted under the Plan will qualify as Incentive Stock Options under Section 422
of the Code. If any provision of the Plan or any Option Agreement relating to an
Incentive Stock Option should be held invalid for the granting of Incentive
Stock Options or illegal for any reason, that determination shall not affect the
remaining provisions hereof, but instead the Plan and the Option Agreement shall
be construed and enforced as if such provision had never been included in the
Plan or the Option Agreement.
(c) This Plan shall be governed by the laws of the State of Florida.
(d) Headings contained in this Plan are for convenience only and shall
in no manner be construed as part of this Plan.
(e) Any reference to the masculine, feminine, or neuter gender shall be
a reference to such other gender as is appropriate.
16. Amendment and Discontinuation of the Plan. The Committee or the Board
may from time to time amend, suspend or terminate the Plan or any Option;
provided, however, that, any amendment to the Plan shall be subject to the
approval of the Company's shareholders if such shareholder approval is required
by any applicable federal or state law or regulation (including, without
limitation, Rule 16b-3 or to comply with Section 162(m) of the Code) or the
rules of any stock exchange or automated quotation system on which the Shares
may then be listed or granted. Except to the extent provided in Sections 9 and
10 hereof, no amendment, suspension or termination of the Plan or any Option
issued hereunder shall substantially impair the rights or benefits of any
Optionee pursuant to any Option previously granted without the consent of the
Optionee.
17. Effective Date and Termination Date. The Effective Date of the Plan is
March 19, 2002, and the Plan shall terminate on the 10th anniversary of the
Effective Date. This Plan shall be submitted to the shareholders of the Company
for their approval and adoption and Options hereunder may be granted prior to
such approval and adoption; provided, however, that any Incentive Stock Options
granted hereunder, and if but only to the extent otherwise required by law or
the rules of any stock exchange or automated quotation system on which the
Shares may be listed, any Non-Qualified Stock Options granted hereunder, prior
to such approval and adoption shall be contingent upon obtaining such approval
and adoption.
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