EXHIBIT 10.1
CONTRARIAN PUBLIC INVESTMENT I, INC.
(THE "COMPANY")
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2004 INCENTIVE STOCK OPTION PLAN
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1. PURPOSE; EFFECTIVENESS OF THE PLAN.
(a) The purpose of this Plan is to advance the interests of the Company
and its stockholders by helping the Company obtain and retain the services of
employees, officers, consultants, and directors, upon whose judgment, initiative
and efforts the Company is substantially dependent, and to provide those persons
with further incentives to advance the interests of the Company.
(b) This Plan will become effective on the date of its adoption by the
Board, provided the Plan is approved by the stockholders of the Company
(excluding holders of shares of Stock issued by the Company pursuant to the
exercise of options granted under this Plan) within twelve months before or
after that date. If the Plan is not so approved by the stockholders of the
Company, any options granted under this Plan will be rescinded and will be void.
This Plan will remain in effect until it is terminated by the Board or the
Committee (as defined hereafter) under section 9 hereof, or June 30, 2024
whichever is earlier, except that no ISO (as defined herein) will be granted
after the tenth anniversary of the date of this Plan's adoption by the Board.
This Plan will be governed by, and construed in accordance with, the laws of the
States of Colorado and Florida.
2. CERTAIN DEFINITIONS.
Unless the context otherwise requires, the following defined terms
(together with other capitalized terms defined elsewhere in this Plan) will
govern the construction of this Plan, and of any stock option agreements entered
into pursuant to this Plan:
(a) "10% Stockholder" means a person who owns, either directly or
indirectly by virtue of the ownership attribution provisions set forth in
Section 424(d) of the Code at the time he or she is granted an Option, stock
possessing more than ten percent (10%) of the total combined voting power or
value of all classes of stock of the Company and/or of its subsidiaries;
(b) "1933 Act" means the federal Securities Act of 1933, as amended;
(c) "Board" means the Board of Directors of the Company;
(d) "Called for under an Option," or words to similar effect, means
issuable pursuant to the exercise of an Option;
(e) "Code" means the Internal Revenue Code of 1986, as amended
(references herein to Sections of the Code are intended to refer to Sections of
the Code as enacted at the time of this Plan's adoption by the Board and as
subsequently amended, or to any substantially similar successor provisions of
the Code resulting from recodification, renumbering or otherwise);
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(f) "Committee" means a committee of two or more Disinterested
Directors, appointed by the Board, to administer and interpret this Plan;
provided that the term "Committee" will refer to the Board during such times as
no Committee is appointed by the Board;
(g) "Company" means Contrarian Public Investment I, Inc., a Colorado
corporation;
(h) "Disability" has the same meaning as "permanent and total
disability," as defined in Section 22(e)(3) of the Code;
(i) "Disinterested Director" means a member of the Board who is not
during the period of one year prior to his or her service as an administrator of
the Plan, or during the period of such service, granted or awarded Stock,
options to acquire Stock, or similar equity securities of the Company under this
Plan or any similar plan of the Company, other than the grant of a Formula
Option pursuant to section 6(m) of this Plan;
(j) "Eligible Participants" means persons who, at a particular time,
are employees, officers, consultants, or directors of the Company or its
subsidiaries;
(k) "Fair Market Value" means, with respect to the Stock and as of
the date an ISO or a Formula Option is granted hereunder, the market price per
share of such Stock determined by the Committee, consistent with the
requirements of Section 422 of the Code and to the extent consistent therewith,
as follows:
(i) If the Stock was traded on a stock exchange on the date in
question, then the Fair Market Value will be equal to the closing price reported
by the applicable composite-transactions report for such date;
(ii) If the Stock was traded over-the-counter on the date in
question and was classified as a national market issue, then the Fair Market
Value will be equal to the last-transaction price quoted by the NASDAQ system
for such date;
(iii) If the Stock was traded over-the-counter on the date in
question but was not classified as a national market issue, then the Fair Market
Value will be equal to the average of the last reported representative bid and
asked prices quoted by the NASDAQ system for such date; and
(iv) If none of the foregoing provisions is applicable, then the
Fair Market Value will be determined by the Committee in good faith on such
basis as it deems appropriate.
(l) "Formula Option" means an NSO granted to non-employee members of
the Board of Directors pursuant to section 6(m) hereof;
(m) "ISO" has the same meaning as "incentive stock option," as
defined in Section 422 of the Code;
(n) "Just Cause Termination" means a termination by the Company of
an Optionee's employment by and/or service to the Company (or if the Optionee is
a director, removal of the Optionee from the Board by action of the stockholders
or, if permitted by applicable law and the by-laws of the Company, the other
directors), in connection with the good faith determination of the Company's
board of directors (or of the Company's stockholders if the Optionee is a
director and the removal of the Optionee from the Board is by action of the
stockholders, but in either case excluding the vote of the Optionee if he or she
is a director or a stockholder) that the Optionee has engaged in any acts
involving dishonesty or moral turpitude or in any acts that materially and
adversely affect the business, affairs or reputation of the Company or its
subsidiaries;
(o) "NSO" means any option granted under this Plan whether
designated by the Committee as a "non-qualified stock option," a "non-statutory
stock option" or otherwise, other than an option designated by the Committee as
an ISO, or any option so designated but which, for any reason, fails to qualify
as an ISO pursuant to Section 422 of the Code and the rules and regulations
thereunder;
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(p) "Option" means an option granted pursuant to this Plan entitling
the option holder to acquire shares of Stock issued by the Company pursuant to
the valid exercise of the option;
(q) "Option Agreement" means an agreement between the Company and an
Optionee, in form and substance satisfactory to the Committee in its sole
discretion, consistent with this Plan;
(r) "Option Price" with respect to any particular Option means the
exercise price at which the Optionee may acquire each share of the Option Stock
called for under such Option;
(s) "Option Stock" means Stock issued or issuable by the Company
pursuant to the valid exercise of an Option;
(t) "Optionee" means an Eligible Participant to whom Options are
granted hereunder, and any transferee thereof pursuant to a Transfer authorized
under this Plan;
(u) "Plan" means this 2004 Incentive Stock Option Plan of the
Company;
(v) "QDRO" has the same meaning as "qualified domestic relations
order" as defined in Section 414(p) of the Code;
(w) "Stock" means shares of the Company's Common Stock, $0.001 par
value;
(x) "Subsidiary" has the same meaning as "Subsidiary Corporation" as
defined in Section 424(f) of the Code;
(y) "Transfer," with respect to Option Stock, includes, without
limitation, a voluntary or involuntary sale, assignment, transfer, conveyance,
pledge, hypothecation, encumbrance, disposal, loan, gift, attachment or levy of
such Option Stock, including without limitation an assignment for the benefit of
creditors of the Optionee, a transfer by operation of law, such as a transfer by
will or under the laws of descent and distribution, an execution of judgment
against the Option Stock or the acquisition of record or beneficial ownership
thereof by a lender or creditor, a transfer pursuant to a QDRO, or to any decree
of divorce, dissolution or separate maintenance, any property settlement, any
separation agreement or any other agreement with a spouse (except for estate
planning purposes) under which a part or all of the shares of Option Stock are
transferred or awarded to the spouse of the Optionee or are required to be sold;
or a transfer resulting from the filing by the Optionee of a petition for
relief, or the filing of an involuntary petition against such Optionee, under
the bankruptcy laws of the United States or of any other nation.
3. ELIGIBILITY.
The Company may grant Options under this Plan only to persons who are
Eligible Participants as of the time of such grant. Subject to the provisions of
sections 4(d), 5 and 6 hereof, there is no limitation on the number of Options
that may be granted to an Eligible Participant.
4. ADMINISTRATION.
(a) Committee. The Committee, if appointed by the Board, will administer
this Plan. If the Board, in its discretion, does not appoint such a Committee,
the Board itself will administer this Plan and take such other actions as the
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 Company's articles of incorporation and by-laws generally.
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(b) Authority and Discretion of Committee. The Committee will have full
and final authority in its discretion, at any time and from time to time,
subject only to the express terms, conditions and other provisions of the
Company's articles of incorporation, by-laws and this Plan, and the specific
limitations on such discretion set forth herein:
(i) to select and approve the persons who will be granted Options under
this Plan from among the Eligible Participants, and to grant to any person so
selected one or more Options to purchase such number of shares of Option Stock
as the Committee may determine;
(ii) to determine the period or periods of time during which Options may
be exercised, the Option Price and the duration of such Options, and other
matters to be determined by the Committee in connection with specific Option
grants and Options Agreements as specified under this Plan;
(iii) to interpret this Plan, to prescribe, amend and rescind rules and
regulations relating to this Plan, and to make all other determinations
necessary or advisable for the operation and administration of this Plan; and
(iv) to delegate all or a portion of its authority under subsections (i)
and (ii) of this section 4(b) to one or more directors of the Company who are
executive officers of the Company, but only in connection with Options granted
to Eligible Participants who are not subject to the reporting and liability
provisions of Section 16 of the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder, and subject to such restrictions and
limitations (such as the aggregate number of shares of Option Stock called for
by such Options that may be granted) as the Committee may decide to impose on
such delegate directors.
(c) Limitation on Authority. Notwithstanding the foregoing, or any other
provision of this Plan, the Committee will have no authority:
(i) to grant Options to any of its members, whether or not approved
by the Board; and
(ii) to determine any matters, or exercise any discretion, in
connection with the Formula Options under section 6(m) hereof, to the extent
that the power to make such determinations or to exercise such discretion would
cause one or more members of the Committee no longer to be "Disinterested
Directors" within the meaning of section 2(i) above.
(d) Designation of Options. Except as otherwise provided herein, the
Committee will designate any Option granted hereunder either as an ISO or as an
NSO. To the extent that the Fair Market Value (determined at the time the Option
is granted) of Stock with respect to which all ISOs are exercisable for the
first time by any individual during any calendar year (pursuant to this Plan and
all other plans of the Company and/or its subsidiaries) exceeds $100,000, such
option will be treated as an NSO. Notwithstanding the general eligibility
provisions of section 3 hereof, the Committee may grant ISOs only to persons who
are employees of the Company and/or its subsidiaries.
(e) Option Agreements. Options will be deemed granted hereunder only upon
the execution and delivery of an Option Agreement by the Optionee and a duly
authorized officer of the Company. Options will not be deemed granted hereunder
merely upon the authorization of such grant by the Committee.
5. SHARES RESERVED FOR OPTIONS.
(a) Option Pool. The aggregate number of shares of Option Stock that may
be issued pursuant to the exercise of Options granted under this Plan will not
exceed One Million (1,000,000) (the "Option Pool"), provided that such number
will be increased by the number of shares of Option Stock that the Company
subsequently may reacquire through repurchase or otherwise.
Shares of Option Stock that would have been issuable pursuant to
Options, but that are no longer issuable because all or part of those Options
have terminated or expired, will be deemed not to have been issued for purposes
of computing the number of shares of Option Stock remaining in the Option Pool
and available for issuance.
(b) Adjustments Upon Changes in Stock. In the event of any change in the
outstanding Stock of the Company ----------------------------------- as a result
of a stock split, reverse stock split, stock dividend, recapitalization,
combination or reclassification, appropriate proportionate adjustments will be
made in: (i) the aggregate number of shares of Option Stock in the Option Pool
that may be issued pursuant to the exercise of Options granted hereunder; (ii)
the Option Price and the number of shares of Option Stock called for in each
outstanding Option granted hereunder; and (iii) other rights and matters
determined on a per share basis under this Plan or any Option Agreement
hereunder. Any such adjustments will be made only by the Board, and when so made
will be effective, conclusive and binding for all purposes with respect to this
Plan and all Options then outstanding. No such adjustments will be required by
reason of the issuance or sale by the Company for cash or other consideration of
additional shares of its Stock or securities convertible into or exchangeable
for shares of its Stock.
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6 TERMS OF STOCK OPTION AGREEMENTS.
Each Option granted pursuant to this Plan will be evidenced by an
agreement (an "Option Agreement") between the Company and the person to whom
such Option is granted, in form and substance satisfactory to the Committee in
its sole discretion, consistent with this Plan. Without limiting the foregoing,
each Option Agreement (unless otherwise stated therein) will be deemed to
include the following terms and conditions:
(a) Covenants of Optionee. At the discretion of the Committee, the
person to whom an Option is granted hereunder, as a condition to the granting of
the Option, must execute and deliver to the Company a confidential information
agreement approved by the Committee. Nothing contained in this Plan, any Option
Agreement or in any other agreement executed in connection with the granting of
an Option under this Plan will confer upon any Optionee any right with respect
to the continuation of his or her status as an employee of, consultant or
independent contractor to, or director of, the Company or its subsidiaries.
(b) Vesting Periods. Except as otherwise provided herein, each
Option Agreement may specify the period or periods of time within which each
Option or portion thereof will first become exercisable (the "Vesting Period")
with respect to the total number of shares of Option Stock called for thereunder
(the "Total Award Option Stock"). Such Vesting Periods will be fixed by the
Committee in its discretion, and may be accelerated or shortened by the
Committee in its discretion.
(c) Exercise of the Option.
(i) Mechanics and Notice. An Option may be exercised to the
extent exercisable (1) by giving written notice of exercise to the Company,
specifying the number of full shares of Option Stock to be purchased and
accompanied by full payment of the Option Price thereof and the amount of
withholding taxes pursuant to subsection 6(c)(ii) below; and (2) by giving
assurances satisfactory to the Company that the shares of Option Stock to be
purchased upon such exercise are being purchased for investment and not with a
view to resale in connection with any distribution of such shares in violation
of the 1933 Act; provided, however, that in the event the Option Stock called
for under the Option is registered under the 1933 Act, or in the event resale of
such Option Stock without such registration would otherwise be permissible, this
second condition will be inoperative if, in the opinion of counsel for the
Company, such condition is not required under the 1933 Act, or any other
applicable law, regulation or rule of any governmental agency.
(ii) Withholding Taxes. As a condition to the issuance of the
shares of Option Stock upon full or partial exercise of an NSO granted under
this Plan, the Optionee will pay to the Company in cash, or in such other form
as the Committee may determine in its discretion, the amount of the Company's
tax withholding liability required in connection with such exercise. For
purposes of this subsection 6(c)(ii), "tax withholding liability" will mean all
federal and state income taxes, social security tax, and any other taxes
applicable to the compensation income arising from the transaction required by
applicable law to be withheld by the Company.
(d) Payment of Option Price. Each Option Agreement will
specify the Option Price with respect to the exercise of Option Stock
thereunder, to be fixed by the Committee in its discretion, but in no event will
the Option Price for an ISO granted hereunder be less than the Fair Market Value
(or, in case the Optionee is a 10% Stockholder, one hundred ten percent (110%)
of such Fair Market Value) of the Option Stock at the time such ISO is granted,
and in no event will the Option Price for an NSO granted hereunder be less than
the 100% of Fair Market Value. The Option Price will be payable to the Company
in United States dollars in cash or by check or, such other legal consideration
as may be approved by the Committee, in its discretion.
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(e) Termination of the Option. Except as otherwise provided
herein, each Option Agreement will specify the period of time, to be fixed by
the Committee in its discretion, during which the Option granted therein will be
exercisable, not to exceed ten years from the date of grant in the case of an
ISO (the "Option Period"); provided that the Option Period will not exceed five
years from the date of grant in the case of an ISO granted to a 10% Stockholder.
To the extent not previously exercised, each Option will terminate upon the
expiration of the Option Period specified in the Option Agreement; provided,
however, that each such Option will terminate, if earlier: (i) ninety days after
the date that the Optionee ceases to be an Eligible Participant for any reason,
other than by reason of death or disability or a Just Cause Termination; (ii)
twelve months after the date that the Optionee ceases to be an Eligible
Participant by reason of such person's death or disability; or (iii) immediately
as of the date that the Optionee ceases to be an Eligible Participant by reason
of a Just Cause Termination. In the event of a sale or all or substantially all
of the assets of the Company, or a merger or consolidation or other
reorganization in which the Company is not the surviving corporation, or in
which the Company becomes a subsidiary of another corporation (any of the
foregoing events, a "Corporate Transaction"), then notwithstanding anything else
herein, the right to exercise all then outstanding Options will vest immediately
prior to such Corporate Transaction and will terminate immediately after such
Corporate Transaction; provided, however, that if the Board, in its sole
discretion, determines that such immediate vesting of the right to exercise
outstanding Options is not in the best interests of the Company, then the
successor corporation must agree to assume the outstanding Options or substitute
therefor comparable options of such successor corporation or a parent or
subsidiary of such successor corporation.
(f) Options Nontransferable. No Option will be transferable by
the Optionee otherwise than by will or the laws of descent and distribution, or
in the case of an NSO, pursuant to a QDRO. During the lifetime of the Optionee,
the Option will be exercisable only by him or her, or the transferee of an NSO
if it was transferred pursuant to a QDRO.
(g) Qualification of Stock. The right to exercise an Option
will be further subject to the requirement that if at any time the Board
determines, in its discretion, that the listing, registration or qualification
of the shares of Option Stock called for thereunder upon any securities exchange
or under any state or federal law, or the consent or approval of any
governmental regulatory authority, is necessary or desirable as a condition of
or in connection with the granting of such Option or the purchase of shares of
Option Stock thereunder, the Option may not be exercised, in whole or in part,
unless and until such listing, registration, qualification, consent or approval
is effected or obtained free of any conditions not acceptable to the Board, in
its discretion.
(h) Additional Restrictions on Transfer. By accepting Options
and/or Option Stock under this Plan, the Optionee will be deemed to represent,
warrant and agree as follows:
(i) Securities Act of 1933. The Optionee understands that the
shares of Option Stock may be registered under the 1933 Act, but until then,
such shares will not be freely tradeable and must be held indefinitely unless
such shares are either registered under the 1933 Act or an exemption from such
registration is available. The Optionee understands that the Company is under no
obligation to register the shares of Option Stock.
(ii) Other Applicable Laws. The Optionee further understands
that Transfer of the Option Stock requires full compliance with the provisions
of all applicable laws.
(iii) Investment Intent. Unless a registration statement is in
effect with respect to the sale of Option Stock obtained through exercise of
Options granted hereunder: (1) Upon exercise of any Option, the Optionee will
purchase the Option Stock for his or her own account and not with a view to
distribution within the meaning of the 1933 Act, other than as may be effected
in compliance with the 1933 Act and the rules and regulations promulgated
thereunder; (2) no one else will have any beneficial interest in the Option
Stock; and (3) he or she has no present intention of disposing of the Option
Stock at any particular time.
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(i) Compliance with Law. Notwithstanding any other provision of this Plan,
Options may be granted pursuant ------------------- to this Plan, and Option
Stock may be issued pursuant to the exercise thereof by an Optionee, only after
there has been compliance with all applicable federal and state securities laws,
and all of the same will be subject to this overriding condition. The Company
will not be required to register or qualify Option Stock with the Securities and
Exchange Commission or any State agency, except that the Company will register
with, or as required by local law, file for and secure an exemption from such
registration requirements from, the applicable securities administrator and
other officials of each jurisdiction in which an Eligible Participant would be
granted an Option hereunder prior to such grant.
(j) Stock Certificates. Certificates representing the Option Stock issued
pursuant to the exercise of Options will bear all legends required by law and
necessary to effectuate this Plan's provisions. The Company may place a "stop
transfer" order against shares of the Option Stock until all restrictions and
conditions set forth in this Plan and in the legends referred to in this section
6(k) have been complied with.
(k) Notices. Any notice to be given to the Company under the terms of an
Option Agreement will be addressed to the Company at its principal executive
office, Attention: Corporate Secretary, or at such other address as the Company
may designate in writing. Any notice to be given to an Optionee will be
addressed to the Optionee at the address provided to the Company by the
Optionee. Any such notice will be deemed to have been duly given if and when
enclosed in a properly sealed envelope, addressed as aforesaid, registered and
deposited, postage and registry fee prepaid, in a post office or branch post
office regularly maintained by the United States Government.
(l) Other Provisions. The Option Agreement may contain such other terms,
provisions and conditions, including such special forfeiture conditions, rights
of repurchase, rights of first refusal and other restrictions on Transfer of
Option Stock issued upon exercise of any Options granted hereunder, not
inconsistent with this Plan, as may be determined by the Committee in its sole
discretion.
(m) Formula Options. On the date on which the Board appoints, or the
stockholders of the Company elect, a person who is not an employee of the
Company as a member of the Board for the first time, such director will be
granted a Formula Option to purchase _________________ shares of Stock.
Immediately after the completion of each annual meeting of the stockholders of
the Company, each member of the Board who is not an employee of the Company will
be awarded a Formula Option to purchase _________________ shares of Stock.
Formula Options will have an Option Price equal to the Fair Market Value of the
Stock as of the date of such grant. Except as otherwise specifically provided in
this section 6(m), the terms of this Plan, including the vesting provisions of
section 6(b), will apply to all Formula Options granted pursuant to this section
6(m).
7. PROCEEDS FROM SALE OF STOCK.
Cash proceeds from the sale of shares of Option Stock issued from time to
time upon the exercise of Options granted pursuant to this Plan will be added to
the general funds of the Company and as such will be used from time to time for
general corporate purposes.
8. MODIFICATION, EXTENSION AND RENEWAL OF OPTIONS.
Subject to the terms and conditions and within the limitations of this
Plan, and except with respect to Formula Options, the Committee may modify,
extend or renew outstanding Options granted under this Plan, or accept the
surrender of outstanding Options (to the extent not theretofore exercised) and
authorize the granting of new Options in substitution therefor (to the extent
not theretofore exercised). Notwithstanding the foregoing, however, no
modification of any Option will, without the consent of the holder of the
Option, alter or impair any rights or obligations under any Option theretofore
granted under this Plan.
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9. AMENDMENT AND DISCONTINUANCE.
The Board may amend, suspend or discontinue this Plan at any time or from
time to time; provided that no action of the Board will cause ISOs granted under
this Plan not to comply with Section 422 of the Code unless the Board
specifically declares such action to be made for that purpose and provided
further that no such action may, without the approval of the stockholders of the
Company, materially increase (other than by reason of an adjustment pursuant to
section 5(b) hereof) the maximum aggregate number of shares of Option Stock in
the Option Pool that may be issued under Options granted pursuant to this Plan
or materially increase the benefits accruing to Plan participants or materially
modify eligibility requirements for the participants. Provided, further, that
the provisions of section 6(m) hereof may not be amended more often than once
during any six (6) month period, other than to comport with changes in the Code,
the Employee Retirement Income Security Act, or the rules and regulations
thereunder. Moreover, no such action may alter or impair any Option previously
granted under this Plan without the consent of the holder of such Option.
10. PLAN COMPLIANCE WITH RULE 16B-3.
With respect to persons subject to Section 16 of the Securities Exchange
Act of 1934, transactions under this plan are intended to comply with all
applicable conditions of Rule 16b-3 or its successors under the 1934 Act. To the
extent any provision of the plan or action by the plan administrators fails so
to comply, it shall be deemed null and void, to the extent permitted by law and
deemed advisable by the plan administrators.
11. COPIES OF PLAN.
A copy of this Plan will be delivered to each Optionee at or before the
time he or she executes an Option Agreement.
Date Plan Adopted by Board of Directors: January 7, 2004
Date Plan Approved by Stockholders January 7, 2004
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