Exhibit 99.
NUTECH DIGITAL, INC.
2003 CONSULTANT STOCK PLAN
PURPOSE OF PLAN
WHEREAS, the purpose of this 2003 Consultant Stock Plan is to advance
the interests of the Company by helping the Company obtain and retain the
services of persons providing consulting services upon whose judgment,
initiative, efforts and/or services the Company is substantially dependent, by
offering to or providing those persons with incentives or inducements affording
such persons an opportunity to become owners of capital stock of the Company.
TERMS AND CONDITIONS OF PLAN
1. DEFINITIONS.
Set forth below are definitions of capitalized terms that are
generally used throughout this Plan, or references to provisions containing such
definitions (capitalized terms whose use is limited to specific provisions are
not referenced in this Section):
(A) AFFILIATE - The term "Affiliate" is defined as any person
controlling the Company, controlled by the Company, or under common control with
the Company.
(B) AWARD - The term "Award" is collectively and
severally defined as any Award Shares granted under this Plan.
(C) AWARD SHARES - The term "Award Shares" is defined as
shares of Common Stock granted by the Plan Committee in accordance with SECTION
6 of this Plan.
(D) BOARD - The term "Board" is defined as the Board of
Directors of the Company, as such body may be reconstituted from time to time.
(E) COMMON STOCK - The term "Common Stock" is defined as
the Company's common stock, no par value.
(F) COMPANY - The term "Company" is defined as NuTech Digital,
Inc., a California corporation.
(G) DISPOSED - The term "Disposed" (or the equivalent terms
"Disposition" or "Dispose") is defined as any transfer or alienation of an Award
which would directly or indirectly change the legal or beneficial ownership
thereof, whether voluntary or by operation of law, or with or without the
payment or provision of consideration, including, by way of example and not
limitation: (i) the sale, assignment, bequest or gift of the Award; (ii) any
transaction that creates or grants a right to obtain an interest in the Award;
(iii) any transaction that creates a form of joint ownership in the Award
between the Recipient and one or more other Persons; (iv) any Disposition of the
Award to a creditor of the Recipient, including the hypothecation, encumbrance
or pledge of the Award or any interest therein, or the attachment or imposition
10
of a lien by a creditor of the Recipient of the Award or any interest therein
which is not released within thirty (30) days after the imposition thereof; (v)
any distribution by a Recipient which is an entity to its stockholders,
partners, co-venturers or members, as the case may be, or (vi) any distribution
by a Recipient which is a fiduciary such as a trustee or custodian to its
settlors or beneficiaries.
(H) ELIGIBLE PERSON - The term "Eligible Person" means any
Person who, at a particular time, is a consultant to the Company or an Affiliate
who provides bona fide consulting services to the Company or the Affiliate,
PROVIDED, HOWEVER, no Award hereunder may be granted to any Person in connection
with the provision of any services incident to the raising of capital or
promotion or maintenance of a market for the Company's securities.
(I) FAIR MARKET VALUE - The term "Fair Market Value" means the
fair market value as of the applicable valuation date of the Award Shares, or
other shares of Common Stock, as the case may be, to be valued (the "SUBJECT
SHARES"), determined by the Plan Committee in its good faith judgment, but in no
event shall the Fair Market Value be less than the par value of the Subject
Shares.
(J) ISSUED SHARES - The term "Issued Shares" is defined
as shares of Common Stock issued pursuant to the terms of this Plan.
(K) PERSON - The term "Person" is defined, in its broadest
sense, as any individual, entity or fiduciary such as, by way of example and not
limitation, individual or natural persons, corporations, partnerships (limited
or general), joint-ventures, associations, limited liability
companies/partnerships, or fiduciary arrangements, such as trusts.
(L) PLAN - The term "Plan" is defined as this 2003
Consultant Stock Plan.
(M) PLAN COMMITTEE - The term "Plan Committee" is defined as
that Committee appointed by the Board to administer and interpret this Plan as
more particularly described in SECTION 3 of the Plan; PROVIDED, HOWEVER, that
the term Plan Committee will refer to the Board during such times as no Plan
Committee is appointed by the Board.
(N) RESTRICTED SHARES - The term "Restricted Shares" is
defined as Award Shares that are subject to restrictions as more particularly
set forth in SECTION 6 of this Plan.
(O) RECIPIENT - The term "Recipient" is defined as any
Eligible Person who, at a particular time, receives the grant of an Award.
(P) SECURITIES ACT - The term "Securities Act" is defined as
the Securities Act of 1933, as amended (references herein to Sections of the
Securities Act are intended to refer to Sections of the Securities Act as
enacted at the time of the adoption of this Plan by the Board and as
subsequently amended, or to any substantially similar successor provisions of
the Securities Act resulting from recodification, renumbering or otherwise).
11
2. TERM OF PLAN.
This Plan shall be effective as of such time and date as this
Plan is adopted by the Board, and this Plan shall terminate on the first
business day prior to the ten (10) year anniversary of the date this Plan became
effective. All Awards granted pursuant to this Plan prior to the effective date
of this Plan shall not be affected by the termination of this Plan and all other
provisions of this Plan shall remain in effect until the terms of all
outstanding Awards have been satisfied or terminated in accordance with this
Plan and the terms of such Awards.
3. PLAN ADMINISTRATION.
--------------------
(A) PLAN COMMITTEE.
--------------
(i) The Plan shall be administered and
interpreted by a committee consisting of two (2) or more members of the Board;
PROVIDED, HOWEVER, no member of the Board who may serve as a member of the Plan
Committee if such person serves or served as a member of the plan committee with
respect to any plan (other than this Plan) of the Company or its Affiliates
which plan was or is established to comply with the provisions of Rule
16b-3(c)(2)(i) to the Securities and Exchange Act of 1934, as amended (i.e.,
pertaining to the establishment of so-called "Section 16b-3 Plans"), and, by
reason of such person's proposed service as a member of the Plan Committee, such
person would not be considered a "disinterested" person within the meaning of
said Rule with respect to such other plan.
(ii) Members of the Plan Committee may resign at any
time by delivering written notice to the Board.
Vacancies in the Plan Committee shall be filled by the Board. The Plan Committee
shall act by a majority of its members in office. The Plan Committee may act
either by vote at a meeting or by a memorandum or other written instrument
signed by a majority of the Plan Committee.
(iii) If the Board, in its discretion, does not
appoint a Plan Committee, the Board itself will
administer and interpret the Plan and take such other actions as the Plan
Committee is authorized to take hereunder; provided that the Board may take such
actions hereunder in the same manner as the Board may take other actions under
the Certificate of Incorporation and bylaws of the Company generally.
(B) ELIGIBILITY OF PLAN COMMITTEE MEMBERS TO RECEIVE AWARDS.
While serving on the Plan Committee, such members shall not be eligible for
selection as Eligible Persons to whom an Award may be granted under the Plan.
(C) POWER TO MAKE AWARDS. The Plan Committee shall have the
full and final authority in its sole discretion, at any time and from
time-to-time, subject only to the express terms, conditions and other provisions
of the Certificate of Incorporation of the Company and this Plan, and the
specific limitations on such discretion set forth herein, to:
(i) Designate the Eligible Persons or classes of
Eligible Persons eligible to receive Awards from among the Eligible
Persons;
(ii) Grant Awards to such selected Eligible Persons
or classes of Eligible Persons in such form and amount (subject to the
terms of the Plan) as the Plan Committee shall determine;
12
(iii) Impose such limitations, restrictions and
conditions upon any Award as the Plan Committee shall deem appropriate
and necessary;
(iv) Interpret the Plan, adopt, amend and rescind
rules and regulations relating to the Plan, and make all other
determinations and take all other action necessary or advisable for the
implementation and administration of the Plan; and
(v) Delegate all or a portion of its authority under
subsections (i) through (iii) of this SECTION 3(c) to one or more
directors of the Company who are executive officers of the Company,
subject to such restrictions and limitations (such as the aggregate
number of shares of Common Stock that may be awarded) as the Plan
Committee may decide to impose on such delegate directors.
In determining the recipient, form and amount of Awards, the
Plan Committee shall consider any factors deemed relevant, including the
individual's functions, responsibilities, value of services to the Company and
past and potential contributions to the Company's profitability and sound
growth.
(D) INTERPRETATION OF PLAN. The Plan Committee shall, in its
sole and absolute discretion, interpret and determine the effect of all matters
and questions relating to this Plan. The interpretations and determinations of
the Plan Committee under the Plan (including without limitation determinations
pertaining to the eligibility of Persons to receive Awards, the form, amount and
timing of Awards, the methods of payment for Awards, the restrictions and
conditions placed upon Awards, and the other terms and provisions of Awards and
the certificates or agreements evidencing same) need not be uniform and may be
made by the Plan Committee selectively among Persons who receive, or are
eligible to receive, Awards under the Plan, whether or not such Persons are
similarly situated. All actions taken and all interpretations and determinations
made under this Plan in good faith by the Plan Committee shall be final and
binding upon the Recipient, the Company, and all other interested Persons. No
member of the Plan Committee shall be personally liable for any action taken or
decision made in good faith relating to this Plan, and all members of the Plan
Committee shall be fully protected and indemnified to the fullest extent
permitted under applicable law by the Company in respect to any such action,
determination, or interpretation.
(E) COMPENSATION; ADVISORS. Members of the Plan Committee
shall receive such compensation for their services as members as may be
determined by the Board. All expenses and liabilities incurred by members of the
Plan Committee in connection with the administration of the Plan shall be borne
by the Company. The Plan Committee may, with the approval of the Board, employ
attorneys, consultants, accountants, appraisers, brokers, or other Persons, at
the cost of the Company. The Plan Committee, the Company and its officers and
directors shall be entitled to rely upon the advice, opinions, or valuations of
any such Persons.
4. STOCK POOL.
(A) MAXIMUM NUMBER OF SHARES AUTHORIZED UNDER PLAN. Shares of
stock which may be issued or granted under the Plan shall be authorized and
unissued or treasury shares of Common Stock. The aggregate maximum number of
shares of Common Stock which may be issued as a grant of Award Shares shall not
exceed 5,000,000 shares of Common Stock (the "STOCK POOL"); PROVIDED, however,
that such number shall be increased by the following:
13
(i) Any shares of Common Stock tendered by a
Recipient as payment for Award Shares;
(ii) Any rights to shares of Common Stock surrendered
by a Recipient as payment for Award Shares; and
(iii) Any Restricted Shares which are granted as
Award Shares, and are subsequently forfeited by the holders thereof.
(B) CALCULATING SHARES AVAILABLE FOR AWARDS. For purposes of
calculating the maximum number of shares of Common Stock in the Stock Pool which
may be issued under the Plan, when Award Shares are granted and the Plan
Committee elects to require payment with respect to such grant, and when shares
of Common Stock are used as full or partial payment for the grant of such
shares, only the net shares issued (including the shares, if any, withheld for
tax withholding requirements) shall be counted.
(C) DATE OF AWARD. The date an Award is granted shall mean the
date selected by the Plan Committee as of which the Plan Committee allots a
specific number of shares to a Recipient with respect to such Award pursuant to
the Plan.
5. AWARD SHARES.
(A) GRANT. The Plan Committee may from time to time, and
subject to the provisions of the Plan and such other terms and conditions as the
Plan Committee may prescribe, grant to any Eligible Person one or more shares of
Common Stock ("AWARD SHARES") allotted by the Plan Committee. The grant of Award
Shares or grant of the right to receive Award Shares shall be evidenced by
either a written consulting agreement or a separate written agreement confirming
such grant, executed by the Company and the Recipient, stating the number of
Award Shares granted and stating all terms and conditions of such grant.
(B) PURCHASE PRICE AND MANNER OF PAYMENT. The Plan Committee,
in its sole discretion, may grant Award Shares in any of the following
instances:
(i) as a "bonus" or "reward" for services previously
rendered and compensated, in which case the recipient of the Award
Shares shall not be required to pay any consideration for such Award
Shares, and the value of such Award Shares shall be the Fair Market
Value of such Award Shares on the date of grant;
(ii) as "compensation" for the previous performance
or future performance of services or attainment of goals, in which case
the recipient of the Award Shares shall not be required to pay any
consideration for such Award Shares (other than the performance of his
services), and the value of such Award Shares received (together with
the value of such services or attainment of goals attained by the
Recipient), may not be less than one hundred percent (100%) of the Fair
Market Value of such Award Shares on the date of grant; or
(iii) in consideration for the payment of a purchase
price for such Award Shares in an amount established by the Plan
Committee, which purchase price may not be less than one hundred
percent (100%) of the Fair Market Value of such Award Shares as of the
date of grant of such purchase right.
14
6. RESTRICTED SHARES.
(A) VESTING CONDITIONS; FORFEITURE OF UNVESTED SHARES. The
Plan Committee may subject or condition the grant of Issued Shares (hereinafter
referred to as "RESTRICTED SHARES") to such vesting conditions based upon
continued provision of services or attainment of goals subsequent to such grant
of Restricted Shares as the Plan Committee, in its sole discretion, may deem
appropriate. In the event the Recipient does not satisfy such vesting
conditions, the Company may require the Recipient, subject to the payment terms
of SECTION 6(B), to forfeit such unvested Restricted Shares. All vesting
conditions imposed on the grant of Restricted Shares, including payment terms
complying with SECTION 6(B), shall be set forth in either a written consulting
agreement or a separate written restricted stock agreement, executed by the
Company and the Recipient on or before the time of the grant of such Restricted
Shares, stating the number of said Restricted Shares subject to such conditions
and further specifying the vesting conditions. If no vesting conditions are
expressly provided in the underlying consulting agreement or in a separate
restricted stock agreement, the Issued Shares shall not be deemed to be
Restricted Shares, and will not be required to be forfeited. Any grant of
Restricted Shares shall be subject to the following limitations:
(i) In no case shall such vesting conditions require
continued provision of services or attainment of goals, as the case may
be, subsequent to the grant of Restricted Shares, for a period of time
which exceeds five (5) years from the date of grant, or on a cumulative
incremental percentage basis which is less than twenty percent (20%)
per year;
(ii) In no case shall the Recipient be required to
forfeit any vested Restricted Shares; and
(iii) In the event of the forfeiture of any unvested
Restricted Shares, the Company shall pay to the Recipient with respect
to all of such unvested Restricted Shares an amount equal to the
original purchase price, if any, paid by the Recipient for such
unvested Restricted Shares.
(B) REPURCHASE PRICE FOR FORFEITED RESTRICTED SHARES. In the
event a Recipient does not satisfy applicable vesting conditions placed upon
Restricted Shares, and the Company exercises its right to require the Recipient
to forfeit such unvested Restricted Shares, the Company shall be required to pay
the Recipient an amount not less than:
(i) The higher of the original purchase price for
such forfeited Restricted Shares OR the Fair Market Value of such
forfeited Restricted Shares on the date of the event triggering such
repurchase rights; or
(ii) The original purchase price for such vested
Restricted Shares; PROVIDED, HOWEVER, that the right to repurchase in
favor of the Company must lapse at the rate of at least twenty percent
(20%) per year over five (5) years from the date of grant of the
Restricted Shares.
15
The payments to be made by the Company to a Recipient for
forfeited Restricted Shares pursuant to SUBSECTION (II) may only be in the form
of cash or cancellation of purchase money indebtedness with respect to the
purchase of said Restricted Shares by the Recipient, if any, and must be paid no
later than ninety (90) days of the date of termination.
(C) RESTRICTIVE LEGEND. Until such time as all conditions
placed upon Restricted Shares lapse, the Plan Committee may place a restrictive
legend on the share certificate representing such Restricted Shares which
evidences said restrictions in such form and subject to such stop instructions
as the Plan Committee shall deem appropriate. The conditions shall similarly
apply to any new, additional or different securities the Recipient may become
entitled to receive with respect to such Restricted Shares by virtue of a stock
split or stock dividend or any other change in the corporate or capital
structure of the Company. The Plan Committee shall also have the right, should
it elect to do so, to require the Recipient to deposit the share certificate for
the Restricted Shares with the Company or its agent, endorsed in blank or
accompanied by a duly executed irrevocable stock power or other instrument of
transfer, until such time as the conditions lapse. The Company shall remove the
legend with respect to any Restricted Shares which become vested.
(D) STOCKHOLDER RIGHTS. The Recipient of Restricted Shares
shall have all rights or privileges of a stockholder of the Company with respect
to the Restricted Shares notwithstanding the terms of this SECTION 6 (with the
exception of SUBSECTION (E) hereof) and, as such, shall be fully entitled to
receive dividends (if any are declared and paid), to vote and to exercise all
other rights of a stockholder with respect to the Restricted Shares.
(E) NON-ASSIGNABILITY. Except as expressly provided in the
underlying consulting agreement or restricted stock agreement, unvested
Restricted Shares may not be Disposed by the Recipient without the prior written
consent of the Company, which consent the Company may withhold in its sole and
absolute discretion, and such purported Disposition shall be null and void AB
INITIO and of no force and effect.
7. REGISTRATION OF ISSUED SHARES.
(A) REGISTRATION OR EXEMPTION FROM REGISTRATION. Unless
expressly stipulated in the underlying consulting agreement or separate
agreement, in no event shall the Company be required at any time to register the
Issued Shares under the Securities Act (including, without limitation, as part
of any primary or secondary offering, or pursuant to Form S-8) or to register or
qualify the Issued Shares under the securities laws of any state or territory.
In the event the Company is not required to register or
qualify the Issued Shares, the Issued Shares shall be issued in reliance upon
such exemptions from registration or qualification under federal and state
securities laws, as the case may be, that the Company and its legal counsel, in
their reasonable discretion, shall determine to be appropriate.
If requested by the Company, the Recipient shall provide such
further representations or documents as the Company or its legal counsel, in
their reasonable discretion, deem necessary or advisable in order to effect
compliance with the conditions of any and all of the aforesaid exemptions from
federal or state registration or qualification which it is relying upon, or with
all applicable rules and regulations of any applicable securities exchanges. If
required by the Company, the Recipient shall provide a letter from a purchaser
representative with credentials reasonably acceptable to the Company to the
effect that such purchaser representative has reviewed the Recipient's proposed
investment in the Issued Shares and has determined that an investment in the
16
Issued Shares: (A) is appropriate in light of the Recipient's financial
circumstances, (B) that the purchaser representative and, if applicable, the
Recipient, have such knowledge and experience in financial and business matters
that the such persons are capable of evaluating the merits and risks of an
investment in the Issued Shares, and (C) that the purchaser representative and,
if applicable, the Recipient, have such business or financial experience to be
reasonably assumed to have the capacity to protect the Recipient's interests in
connection with the purchase of the Issued Shares.
In the event the Company is unable to obtain, without undue
burden or expense, such consents or approvals that may be required from any
applicable regulatory authority (or may be deemed reasonably necessary or
advisable by legal counsel for the Company) with respect to the applicable
exemptions from federal or state registration or qualification which the Company
is reasonably relying upon, the Company shall have no obligation under this
Agreement to issue or sell the Issued Shares until such time as such consents or
approvals may be reasonably obtained without undue burden or expense, and the
Company shall be relieved of all liability with respect to its inability to
issue or sell the Issued Shares.
(B) LEGEND. In the event the Company delivers unregistered
shares, the Company reserves the right to place a restricted legend on the share
certificate or certificates to comply with the Securities Act and any state and
territory securities laws or any exemption from registration or qualification
thereunder which is being relied upon by the Company.
8. ADJUSTMENTS.
(A) SUBDIVISION OR STOCK DIVIDEND. If (i) outstanding shares
of Common Stock shall be subdivided into a greater number of shares by reason of
recapitalization or reclassification, the number of shares of Common Stock, if
any, available for issuance in the Stock Pool shall, simultaneously with the
effectiveness of such subdivision or immediately after the record date of such
dividend, be proportionately increased, and (ii) conversely, if the outstanding
shares of Common Stock shall be combined into a smaller number of shares, the
number of shares of Common Stock, if any, available for issuance in the Stock
Pool shall, simultaneously with the effectiveness of such combination, be
proportionately increased.
(B) ADJUSTMENTS DETERMINED IN SOLE DISCRETION OF BOARD. To the
extent that the foregoing adjustments relate to stock or securities of the
Company, such adjustments shall be made by the Plan Committee, whose
determination in that respect shall be final, binding and conclusive.
(C) NO OTHER RIGHTS TO RECIPIENT. Except as expressly provided
in this SECTION 8, (i) the Recipient shall have no rights by reason of any
subdivision or consolidation of shares of stock of any class or the payment of
any stock dividend or any other increase or decrease in the number of shares of
stock of any class, and (ii) the dissolution, liquidation, merger, consolidation
or divisive reorganization or sale of assets or stock to another corporation, or
any issue by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, shall not affect, and no
adjustment by reason thereof shall be made with respect to, the number of
17
shares. The grant of an Award pursuant to this Plan shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes of its capital or business structure or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of
its business or assets.
9. PERFORMANCE ON BUSINESS DAY.
In the event the date on which a party to this Plan is
required to take any action under the terms of this Plan is not a business day,
the action shall, unless otherwise provided herein, be deemed to be required to
be taken on the next succeeding business day.
10. EMPLOYMENT STATUS.
In no event shall the granting of an Award be construed as
granting a continued right of employment to a Recipient if such Person is
employed by the Company, nor effect any right which the Company may have to
terminate the employment of such Person, at any time, with or without cause,
except to the extent that such Person and the Company have agreed otherwise in
writing.
11. NON-LIABILITY FOR DEBTS.
No unvested Restricted Shares granted hereunder, or any part
thereof, shall be liable for the debts, contracts, or engagements of a Recipient
or such Recipient's successors in interest or shall be subject to disposition by
transfer, alienation, or any other means whether such disposition be voluntary
or involuntary or by operation of law, by judgment, levy, attachment,
garnishment, or any other legal or equitable proceeding (including bankruptcy),
and any attempted disposition thereof shall be null and void AB INITIO and of no
further force and effect.
12. AMENDMENT AND DISCONTINUATION OF PLAN; MODIFICATION OF AWARDS.
(A) AMENDMENT, MODIFICATION OR TERMINATION OF PLAN. The Board
may amend the Plan or suspend or discontinue the Plan at any time or from
time-to-time; PROVIDED, HOWEVER no such action may adversely alter or impair any
Award previously granted under this Plan without the consent of each Recipient
affected thereby.
(B) MODIFICATION OF RESTRICTED SHARE VESTING CONDITIONS.
Subject to the terms and conditions and within the limitations of this Plan,
including vesting conditions, the Plan Committee may modify the conditions
placed upon the grant of any Restricted Shares, PROVIDED, HOWEVER, no
modification of any conditions placed upon Restricted Shares may, without the
consent of the Recipient thereof, adversely alter or impair such Recipient's
rights with respect to such Restricted Shares.
(C) COMPLIANCE WITH LAWS. The Plan Committee may at any time
or from time-to-time, without receiving further consideration from any Person
who may become entitled to receive or who has received the grant of an Award
hereunder, modify or amend Awards granted under this Plan as required to: (i)
comport with changes in securities, tax or other laws or rules, regulations or
regulatory interpretations thereof applicable to this Plan or Awards thereunder
or to comply with stock exchange rules or requirements and/or (ii) ensure that
this Plan is and remains or shall become exempt from the application of any
participation, vesting, benefit accrual, funding, fiduciary, reporting,
disclosure, administration or enforcement requirement of either the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or the
18
corresponding provisions of the Internal Revenue Code of 1986, as amended
(Subchapter D of Title A, Chapter 1 of the Code {encompassing SECTIONS 400 to
420 of the Code}). PROVIDED, HOWEVER, no such modification may, without the
consent of the holder thereof, adversely alter or impair his or her rights with
respect to such Award Shares.
13. WITHHOLDING TAXES.
As a condition of the grant of any Award, the Company shall
have the right to require the Recipient to remit to the Company an amount
sufficient to satisfy any federal, state and/or local withholding tax
requirements incident to such grant or exercise. PROVIDED, HOWEVER, whenever the
Company is delivering any shares of Common Stock the Company may, in its sole
discretion, but without obligation to do so, issue or transfer such shares of
Common Stock net of the number of shares sufficient to satisfy any withholding
tax requirements incident to such issuance or transfer. For withholding tax
purposes, the shares of Common Stock shall be valued on the date the withholding
obligation is incurred.
* * * * *
19