Exhibit 99.1
AEROTELESIS, INC.
2004 STOCK COMPENSATION PLAN
1. Introduction
1.1 ESTABLISHMENT. AEROTELESIS, INC., a Delaware corporation, ("AERO")
hereby establishes the 2004 Stock Compensation Plan (the "Plan"), which permits
the grant of stock options and other stock grants (collectively "Stock Awards")
to certain directors and key employees of AERO, and certain independent
contractors, providing certain services to AERO.
1.2 PURPOSE. The purposes of the Plan are (a) to provide directors and key
employees selected for participation in the Plan with added incentives to
continue in the service of AERO; (b) to create in such directors and employees a
more direct interest in the success of the operations of AERO by relating
compensation to the achievement of long-term corporate economic objectives; (c)
to attract and retain directors and key employees by providing an opportunity
for investment in AERO; (d) to obtain bona fide services for AERO from
independent contractors at reduced compensation or at rates and/or on terms
which are otherwise negotiated favorably to AERO.
1.3 EFFECTIVE DATE. The effective date of the Plan shall be the Effective
Date, which is the date on which the Board of Directors of AERO approved it.
2. Definitions
Through the Plan, except when the context indicates otherwise, the
masculine gender shall include the feminine, and the use of any term in the
singular shall include the plural. The following terms shall have the meanings
set forth:
"AERO" shall mean aeroTelesis, Inc., a Delaware corporation.
"Board" shall mean the board of directors of AERO.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Disabled" or "Disability" shall have the meaning set forth in section 22
(e) (3) of the Code.
"Effective Date" shall have the meaning set forth in section 1.3.
"Eligible Parties" shall mean directors and key employees of AERO, and
Independent Contractors of AERO.
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"Fair Market Value" of a Share shall mean its fair market value as
determined by the Board of Directors in good faith in accordance with section
422 of the Code.
"Independent Contractors" shall mean certain third parties, including both
individuals and companies, that are neither directors nor key employees of AERO,
and who provide certain Service to AERO, including, but not limited to,
advertising, public relations, marketing, and consulting, on an on-going
contractual basis for reduced, or otherwise favorably-negotiated compensation.
"Plan" shall mean this 2004 Stock Compensation Plan.
"Share" shall mean a share of the Common Stock of AERO.
"Stock Award" shall mean a Stock Option and/or a grant of shares pursuant
to the Plan described herein.
"Stock Option" shall mean a right to purchase shares at a stated or
formula price for a specified period of time and shall be a Non-Qualified Stock
Option.
"Stock Option Agreement" shall mean Stock Options evidenced by an
agreement (which need not be identical) in such form as the Board of Directors
may from time to time approve; provided, however, that in the event of any
conflict between the provisions of the Plan and any such agreement, the
provisions of the Plan shall prevail.
"Stock Option Holder" shall mean a Recipient who has been granted one or
more Stock Options.
"Stock Option Price" shall mean the price at which shares subject to a
Stock Option may be purchased.
3. Administration
The Board of Directors shall administer the Plan. Consistent with the
Plan, the Board of Directors, in its sole discretion, shall determine Stock
Awards, including, but not limited to, shares to be subject to Stock Options,
the time at which Stock Awards are to be made, shall fix the Stock Option Price
and the period and manner in which an Stock Option becomes exercisable, and such
other terms and requirements of the compensation incentives under the Plan as
the Board of Directors may deem necessary or desirable. The Board of Directors
shall determine the form or forms of the agreements with recipients that
evidence the particular provisions, terms, conditions, rights, and duties of
AERO and the recipients with respect to Stock Awards, which provisions need not
be identical except as may be provided herein. The Board of Directors may from
time to time adopt such rules and regulations to carry out the purposes of the
Plan as it may deem proper and in the best interests of AERO. The Board of
Directors, in its sole discretion, may correct any defect, supply any omission,
or reconcile any inconsistency in the Plan or in any agreement entered into
hereunder in the manner and to the extent it deems expedient. The
determinations, interpretations, and other actions of the Board of Directors
pursuant to the Plan shall be binding and conclusive for all purposes.
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4. Subject Shares
4.1 NUMBER. The number of shares that are authorized for issuance under
the Plan shall not exceed 50,000 shares. Shares that may be issued upon exercise
of Stock Options or other grants under the Plan shall reduce the number of
shares available for issuance under the Plan. AERO shall at all times during the
term of the Plan and while any Stock Options are outstanding reserve as
authorized but unissued at least the number of shares underlying the Stock
Options granted under the Plan. Any shares subject to Stock Option that expires
or is terminated or canceled before exercise shall become available again for
issuance under the Plan.
4.2 ADJUSTMENTS FOR STOCK SPLIT, STOCK DIVIDEND, ETC. If at any time AERO
increases or decreases the number of shares outstanding or changes the rights
and privileges of such shares through the payment of a stock dividend, the
making of any other distribution payable in shares, a stock split, subdivision,
consolidation, or combination of shares, or a reclassification or
recapitalization involving the shares, then the numbers, rights, and privileges
of shares as to which Stock Awards may be granted and shares then subject to any
outstanding stock Award shall be increased, decreases, or changed in like manner
as if such shares had been issued and outstanding (as determined by the Board of
Directors in its sole discretion).
5. Corporate Reorganization
5.1 REORGANIZATION. Upon the occurrence of any of the following events,
provided notice has been given to recipients and Stock Option Holders, the Plan
and all outstanding Stock Options shall terminate and be of no further force and
effect, without the necessity for any additional action by the Board of AERO:
(a) the merger or consolidation of AERO with or into another
corporation or other reorganization (other than a reorganization under the
United States Bankruptcy Code) of AERO (other than a consolidation, merger, or
reorganization in which AERO is the surviving corporation and which does not
result in any reclassification or change of outstanding shares);
(b) the sale or conveyance of the property of AERO as an entirety or
substantially as an entirety (other than a sale or conveyance in which AERO
continues as holding company of an entity or entities that conduct the business
or business formerly conducted by AERO); or
(c) the dissolution or liquidation of AERO.
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6. Eligibility
Recipients shall be those Eligible Parties who, in the judgment of the
Board of Directors, are performing, or during the term of their incentive
arrangement will perform, vital services in the management, operation, and
development of AERO and contribute significantly, or are expected to contribute
significantly, to the achievement of long-term corporate economic objectives,
and/or, additionally in the case of independent contractors, furnish services to
AERO at reduced rates or on other terms which are significantly favorable to
AERO or provide critical services to AERO. Recipients may be granted from time
to time one or more Stock Awards, except that the Board of Directors shall
separately approve the grant of each Stock Award, and receipt of one Stock Award
shall not result in automatic receipt of any other Award. Upon determination by
the Board of Directors that a Stock Award is to be granted to a recipient,
written notice shall be given specifying the terms, conditions, rights, and
duties related thereto. Each recipient shall, if required by the Board of
Directors, enter into an agreement with AERO, in such form as the Board of
Directors shall determine consistent with the Plan specifying such terms,
conditions, rights, and duties. Stock Awards shall be deemed to be granted as of
the date specified in the grant resolution of the Board of Directors, which date
shall be the date of any related agreement with the recipient. In the event of
any inconsistency between the Plan and any such agreement, the provisions of the
Plan shall govern.
7. Stock Options
7.1 GRANT OF STOCK OPTIONS. Coincident with or following designation for
eligibility under the Plan, a recipient may be granted one or more Stock
Options.
7.2 STOCK OPTION AGREEMENT. A Stock Option Agreement, incorporating and
conforming to the following, shall evidence each Stock Option granted under the
Plan:
(a) Price. The price at which each share may be purchased shall be
determined in each case by the Board of Directors and set forth in the Stock
Option Agreement, but in no event shall the price be less than 100% of the Fair
Market Value of the shares on the date of grant.
(b) Duration of Stock Options; Restrictions on Exercise. Each Stock
Option Agreement shall state the period, as determined by the Board of
Directors, within which the Stock Option may be exercised. Such period shall end
no more than ten years from the date the Stock Option is granted. The Stock
Option Agreement shall also set forth such restrictions on exercise of the Stock
Option during such period, if any, as may be determined by the Board of
Directors. Each Stock Option shall become exercisable over such period of time,
if any, or upon such events, as may be determined by the Board of Directors.
(c) Termination of Service, Death, Disability, etc. The Board of
Directors may specify the period, if any, after which a Stock Option may be
exercised following termination of the Stock Option Holder's employment or
service as a director, or as an independent contractor. The effect of this
section 7.2 shall be limited to determining the consequences of a termination,
and nothing in this section 7.2 shall restrict or otherwise interfere with
AERO's discretion with respect to the termination of any individual's employment
or of any independent contractor's contract, or the stockholders' discretion
with respect to the election of directors.
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(d) Transferability. No Stock Option shall be transferable by the
Stock Option Holder. Each Stock Option is exercisable during the Stock Option
Holder's lifetime only by him, or in the event of Disability or incapacity, by
his guardian or legal representative.
(e) Date of Grant. A Stock Option shall be deemed to be granted on
the date specified in the grant resolution of the Board of Directors.
7.3 STOCKHOLDER PRIVILEGES. No Stock Option Holder shall have any rights
as a stockholder with respect to any shares subject to a Stock Option until the
Stock Option Holder becomes the holder of record of such shares. No adjustments
shall be made for dividends or other distributions or other rights as to which
there is a record date preceding the date such Stock Option Holder becomes the
holder of record of such shares, except as provided in Section 4.
8. Other Stock Grants
From time to time during the duration of this Plan, the Board of Directors
in its sole discretion may adopt one or more incentive compensation arrangements
for Recipients pursuant to which the Recipients may acquire Shares by purchase,
outright grant, or otherwise. Any such arrangements shall be subject to the
general provisions of this Plan, and all Shares issued pursuant to such
arrangements shall be issued under this Plan.
9. Rights of Recipients
9.1 EMPLOYMENT AS EMPLOYEE OR INDEPENDENT CONTRACTOR. Nothing contained in
the Plan or any Stock Award shall confer upon any recipient any right with
respect to the continuation of his employment by AERO, or as an independent
contractor or AERO, or interfere in any way with the right of AERO, subject to
the terms of any separate employment agreement or independent contractor
agreement to the contrary, at any time to terminate such employment or to
increase or decrease the compensation of the recipient from the rate in
existence at the time of the grant of any Stock Award. The Board of Directors
shall determine whether an authorized leave of absence, or absence in military
or government service, shall constitute a termination of employment at the time.
9.2 TRANSFERABILITY. No right or interest of any recipient in a Stock
Award shall be assigned or transferred during the lifetime of the recipient,
voluntarily or involuntarily, or subjected to any lien, directly or indirectly,
by operation of law, or otherwise, including execution, levy, garnishment,
attachment, pledge, or bankruptcy. In the event of a recipient's death, his
rights and interests in any such Stock Awards shall, to the extent provided in
the Plan, be transferable by will or the laws of descent and distribution, and
payment of any amounts due under the Plan shall be made to, and exercise of any
Stock Options may be made by, the recipient's legal representatives, heirs, or
legatees. If, in the opinion of the Board of Directors, a person entitled to
payments or to exercise rights with respect to the Plan is disabled from caring
for his affairs because of mental condition, physical condition, or age, payment
due such person may be made to, and such rights shall be exercised by, such
person's guardian, conservator, or other legal personal representative upon
furnishing the Board of Directors with evidence satisfactory to the Board of
Directors of such status.
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9.3 NO PLAN FUNDING. Obligations to recipients under the Plan shall not be
funded, trusteed, insured, or secured in any manner. Recipients shall have no
security interest in any assets of AERO and shall be only general creditors of
AERO.
10. General
10.1 SECURITIES LAWS. Each Stock Award shall be subject to the requirement
that, if at any time AERO determines that the listing, registration, or
qualification of the shares subject to such Stock Award upon any securities
exchange or under any state or federal law, or the consent or approval of any
governmental or regulatory body, is necessary as a condition of or in connection
with the issuance or purchase of shares thereunder, such Stock Award may not be
accepted or exercised in whole or in part unless such listing, registration,
qualification, consent, or approval has been effected or obtained on conditions
acceptable to the Board of Directors. Nothing herein shall be deemed to require
AERO to apply for or to obtain such listing, registration, or qualification.
10.2 CHANGES IN ACCOUNTING RULES. Notwithstanding any other provision of
the Plan to the contrary, if, during the term of the Plan, any changes in the
financial or tax accounting rules applicable to Stock Awards occurs which, in
the sole judgment of the Board of Directors, may have a material adverse effect
on the reported earnings, assets, or liabilities of AERO, the Board of Directors
shall have the right and power to modify as necessary any then outstanding Stock
Awards as to which the applicable employment or other restrictions have not been
satisfied.
10.3 PLAN AMENDMENT, MODIFICATION, AND TERMINATION. The Board of Directors
may at any time terminate, and from time to time may amend or modify the Plan,
except that no amendment or modification may become effective without approval
of the stockholders if stockholder approval is required to enable the Plan to
satisfy any applicable statutory or regulatory requirements, or if AERO on the
advice of counsel determines that stockholder approval is otherwise necessary or
desirable. No amendment, modification, or termination of the Plan shall
adversely affect any Stock Award theretofore granted without the consent of the
recipient holding such Stock Award.
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10.4 WITHHOLDING. The Company shall have the right to require prior to the
issuance or delivery of any shares of Common Stock pursuant to the Plan, that a
recipient make arrangements satisfactory to the Board for the withholding of any
taxes required by law to be withheld with respect to the issuance or delivery of
such shares, including without limitation by the withholding of shares that
would otherwise be so issued or delivered, by withholding form any other payment
due to the recipient, or by a cash payment to the Company by the recipient.
10.5 GOVERNING LAW. The Plan and all agreements hereunder shall be
construed in accordance with the governed by the laws of the State of Delaware.
AEROTELESIS, INC.
AUGUST 1, 2004
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