SCHEDULE 14C
(RULE 14C-101)
INFORMATION REQUIRED IN INFORMATION STATEMENT
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section
14(c) of the Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[_] Preliminary Information Statement
|_| Confidential, for use of the Commission Only (as permitted
|X| Definitive Information Statement by Rule 14a-6(e)(2))
GIANT JR. INVESTMENTS CORP.
--------------------------------------------
(Name of Registrant as Specified in Charter)
Payment of filing fee (check the appropriate box):
[X] No fee required.
|_| Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
|_| Fee paid previously with preliminary materials.
|_| Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing party:
(4) Date filed:
GIANT JR. INVESTMENTS CORP.
2575 MCCABE WAY
IRVINE, CALIFORNIA 92614
INFORMATION STATEMENT PURSUANT TO
SECTION 14(c) OF THE SECURITIES
EXCHANGE ACT OF 1934 AND
REGULATION 14C THEREUNDER
TO OUR STOCKHOLDERS:
This Information Statement is being sent by first class mail to all record and
beneficial owners of the $0.001 par value Common Stock of Giant Jr. Investments
Corp., a Nevada corporation, (the "Company").
On October 1, 2004, the record date for determining the identity of stockholders
who are entitled to receive this Information Statement, 139,450,000 shares of
Common Stock were issued and outstanding. The Common Stock constitutes the sole
outstanding class of voting securities of the Company. Each share of Common
Stock entitles the holder thereof to one vote on all matters submitted to
shareholders. The mailing date of this Information Statement is November 11,
2004.
NO VOTE OR OTHER CONSENT OF THE STOCKHOLDERS IS SOLICITED IN
CONNECTION WITH THIS INFORMATION STATEMENT.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE
REQUESTED NOT TO SEND US A PROXY.
On October 1, 2004, stockholders who collectively own 73,661,392 shares, or
approximately 52.8%, of our issued and outstanding Common Stock (the "Consenting
Stockholders"), consented in writing to:
1. Amending the Articles of Incorporation to provide for a 100:1 reverse split
of the issued and outstanding shares of common stock and requiring each
stockholder to tender certificates representing shares of common stock to the
Company for exchange.
2. Adopting the 2004 Stock Option Plan.
The Consenting Stockholders have not consented to or considered any other
corporate action.
Our Company will pay the cost of printing and distributing this Information
Statement to our stockholders. Brokers, nominees and other custodians will be
instructed to forward copies of this Information Statement to the beneficial
owners of shares held in custodial accounts. We will reimburse brokers, nominees
and other custodians for the expenses incurred in forwarding this Information
Statement to the beneficial owners of our Common Stock.
FORWARD LOOKING STATEMENTS
This Information Statement and other reports that we file with the SEC contain
forward-looking statements about our business containing the words "believes,"
"anticipates," "expects" and words of similar import. These forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results or performance to be materially different from the
results or performance anticipated or implied by such forward-looking
statements. Given these uncertainties, stockholders are cautioned not to place
undue reliance on forward-looking statements. Except as specified in SEC
regulations, we have no duty to publicly release information that updates the
forward-looking statements contained in this Information Statement. Additional
risks will be disclosed from time to time in our future SEC filings.
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GENERAL
This Information Statement is being furnished to all of the Common Stock
shareholders of the Company, in connection with the approval by the Company's
shareholders of an amendment to the Company's Articles of Incorporation relating
to a 100:1 reverse split (the "Amendment") and the 2004 Stock Option Plan.
The Company's Board of Directors and shareholders owning approximately 52.8% of
the Company's Common Stock on October 1, 2004, approved and recommended that the
Amendment be effected and the 2004 Stock Option Plan adopted. Such approval of
recommendations by the Board of Directors and shareholders will become effective
as of the date the Amendment is filed with the Nevada Secretary of State and as
to the 2004 Stock Option Plan, twenty (20) days after the mailing of this
Information Statement to the Company's shareholders. The Amendment is expected
to be filed on or about December 1, 2004, and will become effective upon the
filing with the Secretary of State of Nevada (the "Effective Date"). If the
proposed Amendment and 2004 Stock Option Plan were not adopted by written
consent it would have been required to be considered by the Company's
shareholders, at a special shareholders' meeting convened for the specific
purpose of approving the Amendment and 2004 Stock Option Plan.
The elimination of the need for a special meeting of shareholders to approve the
Amendment is authorized by the Nevada Revised Statutes (the " Nevada Law") which
provides that the written consent of the holders of the outstanding shares of
voting stock, having not less than the minimum number of votes which would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted, may be substituted for such a
special meeting. Pursuant to the Nevada Law, a majority of the outstanding share
of voting stock entitled to vote thereon is required in order to approve an
amendment to Company's Articles of Incorporation changing its name. In order to
eliminate the costs and management time involved in holding a special meeting
and in order to approve the Amendment as early as possible in order to
accomplish the purpose of the Company as hereafter described, the Board of
Directors of the Company voted to utilize the written consent of the holders of
a majority in interest of the outstanding Common Stock of the Company.
Stockholders, who beneficially own approximately 52.8% of the outstanding Common
Stock of the Company entitled to vote on the Amendment, gave their written
consent to the approval of the Amendment described in this Information Statement
on October 1, 2004. The written consent became effective on October 1, 2004, the
date on which their written consent was filed with the Secretary of the Company.
The date on which this Information Statement was first sent to the shareholders
is on or about November 11, 2004. The record date established by the Company for
the purpose of determining the number of outstanding shares of Common Stock of
the Company is October 1, 2004 (the "Record Date").
Pursuant to the Nevada Law, the Company is required to provide prompt notice of
the taking of the corporation action without a meeting to shareholders who have
not consented in writing to such action. Inasmuch as the Company will have
provided to its shareholders of record this Information Statement, the Company
will notify its shareholders by letter filed under a Current Report on Form 8-K
of the effective date of the name change. No additional action will be
undertaken pursuant to such written consents, and no dissenters' rights under
the Nevada Law are afforded to the Company's shareholders as a result of the
approval of the Amendment.
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CONSENTING STOCKHOLDERS
On October 1, 2004, the following Consenting Stockholders, who collectively own
approximately 52.8% of our Common Stock, consented in writing to approve the
Amendment;
NAME SHARES PERCENT
- ----------------------------------- ---------- -------
Bruce Caldwell 10,415,392 8.9%
Forest, Glenneyre & Associates, Inc 43,350,000 31.1%
Javan Khazali 2,500,000 1.8%
Bel Air Stuffing Group, Inc. 2,500,000 1.8%
Drent Gordon B Johnson 6,000,000 4.3%
F.A. Ventures, Inc. 5,400,000 3.9%
Martin Szlavy 1,996,000 1.4%
William B. Barnett 1,500,000 1.1%
---------- -------
TOTAL 73,661,392 52.8%
Under Nevada law, we are required to give all stockholders written notice of any
actions that are taken by written consent without a stockholders meeting. Under
Section 14(c) of the Securities Exchange Act of 1934 (the "Exchange Act"), the
actions taken by written consent without a shareholders meeting cannot become
effective until 20 days after the mailing date of this Information Statement. We
are not seeking written consent from any of our stockholders and our other
stockholders will not be given an opportunity to vote with respect to the
actions taken. All necessary corporate approvals have been obtained, and this
Information Statement is furnished solely for the purpose of:
o Advising stockholders of the actions taken by written consent, as required
by Nevada law; and
o Giving stockholders advance notice of the actions taken, as required by
the Exchange Act
Stockholders who were not afforded an opportunity to consent or otherwise vote
with respect to the actions taken have no right under Nevada law to dissent or
require a vote of all our stockholders.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth Common Stock ownership information as of October
1, 2004, with respect to (i) each person known to the Company to be the
beneficial owner of more than five percent (5%) of the Company's Common Stock;
(ii) each director of the Company; and (iii) all directors, executive officers
and designated shareholders of the Company as a group. This information as to
beneficial ownership was furnished to the Company by or on behalf of the persons
named. Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission and generally includes voting or investment
power with respect to securities. In accordance with the Securities and Exchange
Commission rules, shares of our common stock which may be acquired upon exercise
of stock options or warrants which are currently exercisable or which become
exercisable within 60 days of the date of the table are deemed beneficially
owned by the optionees. Subject to community property laws, where applicable,
the persons or entities named in the table above have sole voting and investment
power with respect to all shares of common stock indicated as beneficially owned
by them.
AMOUNT
NAME AND ADDRESS BENEFICIALLY PERCENT OF
OF BENEFICIAL OWNER OWNED CLASS
- ----------------------------------- ------------ ----------
Imran Firoz, CEO, CFO, and Director -0- 0.0%
Dato'Sri Ram Sarma, Director 4,279,876 3.0%(1)
A. Chandrakumanan, Director 4,279,876 3.0%(2)
Javan Khazali, Director 2,500,000 1.8%
Alberto Caberlotto, Director 500,000 0.3%
Dr. Conrad Loreto, Director -0- 0.0%
Diego Moya, Director -0- 0.0%
Bruce Caldwell 10,415,392 7.5%(3)
Officers and Directors as a Group
(7 individuals) 11,559,752 8.3%
(1) Includes 3,969,876 shares owned by Kres Private Ltd., a Company of which
Mr. Sarma owns 50% interest.
(2) Includes 3,969,876 shares owned by Kres Private Ltd., a Company of which
Mr. Chandrakumanan owns 50% interest.
(3) Does not include 2,106,400 owned by Mr. Caldwell's wife of which he
disclaims any beneficial interest.
APPROVAL OF
AMENDMENT TO OUR ARTICLES OF INCORPORATION
DECLARING A 100:1 REVERSE SPLIT OF OUR COMMON STOCK
FREQUENTLY ASKED QUESTIONS
Q: HOW WILL THE REVERSE SPLIT AFFECT MY OWNERSHIP OF THE COMPANY?
A: You will own the same class of our common stock after the Reverse Split as
you did before the Reverse Split. However, your percentage ownership of the
Company will be substantially reduced because our outstanding Preferred
Warrants, each of which was issued in exchange for one share of our common stock
will be redeemed for one share of our post-split common stock. Based on the
number of shares of our common stock and Preferred Warrants outstanding on the
record date, the Reverse Split will result in a significant reduction of the
percentage ownership represented by shares of our common stock and a
corresponding percentage increase in the ownership interests represented by our
Preferred Warrants. The change in respective ownership interests could result in
a change in control of the Company.
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Q: HOW WILL THE REVERSE SPLIT AFFECT THE OFFICER, DIRECTORS AND EMPLOYEES OF
THE COMPANY?
A: The officers, directors and employees of the Company will continue in the
same capacities after the Reverse Split as before the Reverse Split. To the
extent that they are owners of common stock or Preferred Warrants, their
ownership interest will be affected the same as any other stockholders or
warrant holders.
Q: WHY IS THE REVERSE SPLIT NECESSARY?
A: Prior to the Reverse Split there were outstanding 139,450,000 of our
common stock and it was trading in the public markets at less than $.03 per
share. The low share price makes it very difficult and uneconomic for small
investors to buy or sell shares because the transaction costs are too great for
small investments. In addition, the large number of shares that are outstanding
continues to exert substantial pressure on the per share price. The reverse
split will immediately increase the per share price and reduce the number of
shares of our common stock that can be traded in the public markets.
Q: HOW WILL THE 2004 STOCK OPTION PLAN BE USED?
A: The 2004 Stock Option Plan (the "Plan") will be used for a number of
purposes: to attract and retain qualified directors, officers and employees; to
compensate consultants for services rendered to us which we could not otherwise
afford to obtain; and to provide incentives for the generation of stockholder
value. The Plan will be administered by our board of directors, who will
determine the recipients, size, and other terms of any awards under the Plan.
Q: HOW DO I EXCHANGE CERTIFICATES REPRESENTING SHARES OF PRE-SPLIT STOCK FOR
CERTIFICATES REPRESENTING SHARES OF POST-SPLIT STOCK?
A: Enclosed with this Information Statement is a letter of transmittal and
instructions for surrendering certificates representing our pre-split shares of
common stock. If you are a record stockholder, you should complete the letter of
transmittal and send it with certificates representing your shares to the
address set forth in the letter. Upon surrender of a certificate for
cancellation with a duly executed letter of transmittal, we will issue new
certificates representing the number of post-split shares to which you are
entitled as soon as practical. Please note that there are specific requirements
if the certificates representing post-split shares of our common stock are to be
issued to a person or set to an address other than the ones reflected on our
books and records.
Q: WHAT IF MY SHARES OF PRE-SPLIT COMMON STOCK ARE HELD IN A BROKERAGE
ACCOUNT?
A: Normally, your broker or its nominee will submit certificates representing
shares of pre-split common stock for conversion on your behalf. To ensure that
the certificates representing your shares are submitted timely, you should
contact your broker and have a certificate representing the shares of pre-split
common stock issued in your name and submit it for exchange directly to our
transfer agent with the letter of transmittal and instructions.
Q: WHAT HAPPENS IF I DO NOT SURRENDER MY CERTIFICATES OF REPRESENTING
PRE-SPLIT SHARES?
A: You are required to surrender certificates representing shares of our
pre-split common stock. The board of directors has determined that a reasonable
time for the exchange of certificates is 90 days after the date of this
information statement. Until you receive certificates representing post-split
shares of our common stock you are not entitled to receive notice of or vote at
stockholder meetings or receive dividends or other distributions on the shares
of our post-split common stock. Under the Nevada Revised Statutes, we may seek
to enforce the delivery of certificates for exchange through proceedings in
court.
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Q: WHAT IF I HAVE LOST MY CERTIFICATES?
A: If you have lost your certificates representing pre-split share of our
common stock, you should contact our transfer agent as soon as possible to have
a new certificate issued. You may be required to post a bond or other security
to reimburse us for any damages or costs if the certificate is later delivered
for conversion. Our transfer agent may be reached at:
Attn: William Garza
U.S. Stock Transfer Corp.
1745 Gardena Avenue, 2nd Floor
Glendale, California 91204
Telephone: (818) 502-1104 Facsimile: (818) 502-0674
Q: CAN I REQUIRE YOU TO PURCHASE MY STOCK?
A: No. Under the Nevada Revised Statutes, you are not entitled to appraisal
and purchase of your stock as a result of the Reverse Split.
Q: WHO WILL PAY THE COSTS OF REVERSE SPLIT?
A: We will pay all of the costs of Reverse Split in Nevada, including
distributing this Information Statement. We may also pay brokerage firms and
other custodians for their reasonable expenses for forwarding information
materials to the beneficial owners of our common stock. We do not anticipate
contracting for other services in connection with the Reverse Split. Each
stockholder must pay the costs of exchanging their certificates for new
certificates.
Q: WILL I HAVE TO PAY TAXES ON THE NEW CERTIFICATES?
A: We believe that the Reverse Split is not a taxable event and that you will
be entitled to the same basis in the post-split shares that you had in the
pre-split shares of our common stock. Everyone's tax situation is different and
you should consult with your personal tax advisor regarding the tax effect of
the Reverse Split.
On October 1, 2004 the Board of Directors of the Company and shareholders owning
approximately 52.8% of the Company's issued and outstanding common stock
approved an Amendment to the Company's Articles of Incorporation representing
Article 4 in its entirety with the following:
"4A. One share of the common stock of the Corporation, par value $.001 per
share, shall be issued for each 100 shares of Common Stock, par value $.001 per
share, of the Corporation issued and outstanding as of the date hereof. Every
holder of shares of common stock, $.001 par value per share, outstanding on the
date hereof shall be directed to submit the certificates representing such
shares to the Corporation within 90 days after the date hereof for exchange as
aforesaid.
4B. Immediately following the exchange pursuant to Article 4A of these
Articles of Incorporation, the aggregate number of shares of all classes of
capital stock which the Corporation has authority to issue is 305,000,000 of
which 300,000,000 are to be shares of common stock, $.001 par value, and
5,000,000 are to be shares of preferred stock, $.001 par value. The shares may
be issued by the Corporation from time to time as approved by the board of
directors of the Corporation without the approval of the stockholders except as
otherwise provided by the Nevada Revised Statutes, these Articles of
Incorporation, or the rules of a national securities exchange if applicable. The
consideration for the issuance of the shares shall be paid to or received by the
Corporation in full before their issuance and shall not be less than the par
value per share. The consideration for the issuance of shares shall be cash,
services rendered, personal property (tangible or intangible), real property,
leases of real property or any combination of the foregoing. In the absence of
actual fraud in the transaction, the judgment of the board of directors as to
the value of such consideration shall be conclusive. Upon payment of such
consideration such shares shall be deemed to be fully paid and nonassessable. In
the case of a stock dividend, the part of the surplus of the Corporation, which
is transferred to stated capital upon the issuance of shares as a stock
dividend, shall be deemed to be the consideration for their issuance.
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(a) Common Shares.
(i) Except as provided in Articles of Incorporation, or in the
powers, designations preferences and relative rights of any
preferred stock, the holders of the common stock shall
exclusively possess all voting power. Subject to the
provisions of these Articles, each holder of shares of common
stock shall be entitled to one vote for each share held by
such holders.
(ii) Whenever there shall have been paid, or declared and set aside
for payment, to the holders of the outstanding shares of any
class or series of stock having preference over the common
stock as to the payment of dividends, the full amount of
dividends and sinking fund or retirement fund or other
retirement payments, if any, to which such holders are
respectively entitle in preference to the common stock, then
dividends may be paid on the common stock, and on any class or
series of stock entitled to participate therewith as to
dividends, out of any assets legally available for the payment
of dividends, but only when and as declared by the board of
directors of the Corporation.
(iii) In the event of any liquidation, dissolution or winding up of
the Corporation, after there shall have been paid, or declared
and set aside for payment, to the holders of the outstanding
shares of any class having preference over the common stock in
any such event, the full preferential amounts to which they
are respectively entitled, the holders of the common stock and
any class or series of stock entitled to participate
therewith, in whole or in part, as to distribution of assets
shall be entitled, after payment or provision for payment of
all debts and liabilities of the Corporation, to receive the
remaining assets of the Corporation available for
distribution, in cash or in kind.
(iv) Each share of common stock shall have the same relative
powers, preferences and rights as, and shall be identical in
all respects with, all the other shares of common stock of the
Corporation.
(b) Preferred Shares.
(i) Except as provided in these Articles of Incorporation, the
board of directors of the Corporation is authorized, by
resolution or resolutions from time to time adopted, to
provide for the issuance of preferred stock in series and to
fix and state the powers, designations, preferences and
relative, participating, optional or other special rights of
the shares of each such series, and the qualifications,
limitation or restrictions thereof, including, but not limited
to determination of any of the following:
a. the distinctive serial designation and the number of
shares constituting such series;
b. the rights in respect of dividends, if any, to be paid
on the shares of such series, whether dividends shall be
cumulative and, if so, from which date or dates, the
payment or date or dates for dividends, and the
participating or other special rights, if any, with
respect to dividends;
c. the voting powers, full or limited, if any, of the
shares of such series;
d. whether the shares of such series shall be redeemable
and, if so, the price or prices at which, and the terms
and conditions upon which such shares may be redeemed:
e. the amount or amounts payable upon the shares of such
series in the event of voluntary or involuntary
liquidation, dissolution or winding up of the
Corporation;
f. whether the shares of such series shall be entitled to
the benefits of a sinking or retirement fund to be
applied to the purchase or redemption of such shares,
and, if so entitled, the amount of such fund and the
manner of its application, including the price or prices
at which such shares may be redeemed or purchased
through the application of such funds;
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g. whether the shares of such series shall be convertible
into, or exchangeable for, shares of any other class or
classes or any other series of the same or any other
class or classes of stock of the Corporation and, if so
convertible or exchangeable, the conversion price or
prices, or the rate or rates of exchange, and the
adjustments thereof, if any, at which such conversion or
exchange may be made, and any other terms and conditions
of such conversion or exchange;
h. the subscription or purchase price and form of
consideration for which the shares of such series shall
be issued; and
i. whether the shares of such series which are redeemed or
converted shall have the status of authorized but
unissued shares of preferred stock and whether such
shares may be reissued as shares of the same or any
other series of preferred stock.
(ii) Each share of each series of preferred stock shall have the
same relative powers, preferences and rights as, and shall be
identical in all respects with, all the other shares of the
Corporation of the same series, except the times from which
dividends on shares which may be issued from time to time of
any such series may begin to accrue.
(c) Pre-emptive Rights. No holder of any of the shares of any class of
the Corporation shall be entitled as of right to subscribe for,
purchase, or otherwise acquire any shares of any class of the
Corporation which the Corporation proposes to issue or any rights or
options which the Corporation proposes to grant for the purchase of
shares of any class of the Corporation or for the purchase of any
shares, bonds, securities, or obligations of the Corporation which
are convertible into or exchangeable for, or which carry any rights,
to subscribe for, purchase, or otherwise acquire shares of any class
of the Corporation; and any and all of such shares, bonds,
securities, or obligations of the Corporation, whether now or
hereafter authorized or created, may be issued, or may be reissued
or transferred if the same have been reacquired and have treasury
status, and any and all of such rights and options may be granted by
the Board of Directors to such persons, firms, corporations, and
associations, and for such lawful consideration, and on such terms,
as the board of directors in its discretion may determine, without
first offering the same, or any thereof, to any said holder.
(d) Cumulative Voting. No shares of any class or series shall have
cumulative voting rights in the election of directors.
(e) Other Voting Rights. Any and all persons who have been granted an
option by the Corporation to purchase or otherwise acquire any
series of shares, both common and preferred, or to whom the
Corporation has become financially obligated through the issuance of
a bond, debenture and/or other financial instrument shall be
entitled to voting rights in the same manner as if they were
stockholders in the Corporation as may be specified in a resolution
of the Board of Directors in accordance with Nevada Revised Statutes
78.197 and 78.200, respectively."
APPROVAL OF THE 2004
STOCK OPTION PLAN
DESCRIPTION OF THE PLAN
The Board of Directors of the Company and the owners of a majority of the
outstanding voting interests approved the 2004 Stock Option Plan (the "Plan").
The purpose of the Plan is to maintain our ability to attract and retain highly
qualified and experienced directors, officers and consultants to give such
directors, officers and consultants a continued proprietary interest in the
success of the Company and its subsidiaries. The following summary is qualified
in its entirety by reference to the Plan itself, a copy of which is available to
any stockholder by written request to the Company.
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General Provisions of the Plan. The Plan provides eligible employees and
consultants the opportunity to participate in the enhancement of shareholder
value by the grants of warrants, options, restricted common or convertible
preferred stock, unrestricted common or convertible preferred stock and other
awards under the Plan and to have their bonuses and/or consulting fees payable
in warrants, restricted common or convertible preferred stock, unrestricted
common or convertible preferred stock and other awards, or any combination
thereof. In addition, we expect the Plan will further strengthen the
identification of the directors, employees and consultants with the
stockholders. Certain option and warrants to be granted under the Plan are
intended to qualify as Incentive Stock Options ("ISOs") pursuant to Section 422
of the Internal Revenue Code of 1986, as amended ("Code"), while other options
and warrants and preferred stock granted under the Plan will be nonqualified
options or warrants which are not intended to qualify as ISOs ("Nonqualified
Options"). Employees, consultants and directors who participate or become
eligible to participate in the Plan from time to time are referred to
collectively herein as "Participants". As used in the Plan, the term
"Affiliates" means any "parent corporation" of the Company and any "subsidiary
corporation" of the Company within the meaning of Code Sections 424(e) and (f),
respectively.
Administration of the Plan. The Plan will be administered by the Board of
Directors of the Company (the "Board"). When acting in such capacity the Board
is sometimes refereed to as the "Committee". If the Company is governed by Rule
16b-3 promulgated by the Securities and Exchange Commission ("SEC") pursuant to
the Securities Exchange Act of 1934, as amended ("Exchange Act"), no director
will serve as a member of the Committee unless he or she is a "disinterested
person" within the meaning of such Rule 16b-3.
Awards under the Plan. The Committee will have sole and absolute discretionary
authority (i) to determine, authorize, and designate those persons pursuant to
the Plan who are to receive warrants, options, restricted common or convertible
preferred stock, or unrestricted common or convertible preferred stock under the
Plan, (ii) to determine the number of shares of common stock to be covered by
such grant or such options or warrants and the terms thereof, (iii) to determine
the type of common stock granted: restricted common or convertible preferred
stock, unrestricted common or convertible preferred stock or a combination of
restricted and unrestricted common or convertible preferred stock, and (iv) to
determine the type of option or warrant granted: ISO, Nonqualified Option or a
combination of ISO and Nonqualified Options. The Committee shall thereupon grant
options or warrants in accordance with such determinations as evidenced by a
written option or warrant agreement. Subject to the express provisions of the
Plan, the Committee shall have discretionary authority to prescribe, amend and
rescind rules and regulations relating to the Plan, to interpret the Plan, to
prescribe and amend the terms of the option or warrant agreements (which need
not be identical) and to make all other determinations deemed necessary or
advisable for the administration of the Plan.
Purchase Price Under Options and Warrants. The purchase price of each of common
stock subject to each option or warrant granted pursuant to the Plan shall be
determined by the Committee at the time the option or warrant is granted and, in
the case of ISOs, shall not be less than 100% of the fair market value of a
share of common stock on the date the option or warrant is granted, as
determined by the Committee. In the case of an ISO granted to a person that is
the beneficial owner of more than 10% of our common stock, the option or warrant
price shall not be less than 110% of the fair market value of a share of common
stock on the date the option or warrant is granted. The purchase price of each
share of common stock subject to a Nonqualified Option or Warrant under the Plan
shall be determined by the Committee prior to granting the option or warrant.
The Committee shall set the purchase price for each share subject to a
Nonqualified Option or Warrant at either the fair market value of each share on
the date the option or warrant is granted, or at such other price as the
Committee in its sole discretion shall determine.
Restricted Stock. Awards of restricted stock may be in addition to or in lieu of
option or warrant grants. Awards may be conditioned on the attainment of
particular performance goals based on criteria established by the Committee at
the time of each award of restricted stock. During a period set forth in the
agreement (the "Restriction Period"), the recipient shall not be permitted to
sell, transfer, pledge, or otherwise encumber the shares of restricted stock;
except that such shares may be used, if the agreement permits, to pay the option
or warrant price pursuant to any option or warrant granted under the Plan,
provided an equal number of shares delivered to the Participant shall carry the
same restrictions as the shares so used. Shares of restricted stock shall become
free of all restrictions if during the Restriction Period, (i) the recipient
dies, (ii) the recipient's directorship, employment, or consultancy terminates
by reason of permanent disability, as determined by the Committee, (iii) the
recipient retires after attaining both 59 yeas of age and five years of
continuous service with the Company and/or a division or subsidiary, or (iv) if
9
provided in the agreement, there is a "change in control" of the Company (as
defined in such agreement). Unless and to the extent otherwise provided in the
agreement, shares of restricted stock shall be forfeited and revert to the
Company upon the recipient's termination of directorship, employment or
consultancy during the Restriction Period for any reason other than death,
permanent disability, as determined by the Committee, retirement after attaining
both 59 years of age and five years of continuous service with the Company
and/or subsidiary or division, or to the extent provided in the agreement a
"change in control" of the Company (as defined in such agreement), except to the
extent the Committee, in its sole discretion, finds that such forfeiture might
not be in the best interests of the Company.
Bonuses and Past Salaries and Fees Payable in Unrestricted Stock. In lieu of
cash bonuses, salaries and fees otherwise payable by the Company or applicable
division or subsidiary, employees and consultants eligible to participate in the
Plan, the Committee, in its sole discretion, may determine that such bonuses,
salaries and fees shall be payable in unrestricted common stock or partly in
unrestricted common stock and partly in cash. Such bonuses shall be in
consideration of services previously performed and as an incentive toward future
services and shall consist of shares of unrestricted common stock subject to
such terms as the Committee may determine in its sole discretion. The number of
shares of unrestricted common stock payable in lieu of a bonus otherwise payable
shall be determined by dividing such bonus amount by the fair market value of
one share of common stock on the date the bonus is payable, with fair market
value determined as of such date.
Grant of Convertible Preferred Stock. The Committee shall have sole and absolute
discretionary authority (i) to determine, authorize, and designate those persons
pursuant to the Plan who are to receive restricted preferred stock, or
unrestricted preferred stock under the Plan, and (ii) to determine the number of
shares of common stock to be issued upon conversion of such shares of preferred
stock and the terms thereof.
Amendments or Termination. The Board may amend, alter or discontinue the Plan,
but no amendment or alteration shall be made which would impair the rights of
any Participant, without his consent, under any option, warrant or preferred
stock theretofore granted.
EXECUTIVE COMPENSATION
The following table sets forth information concerning the compensation earned
during the Company's last three fiscal years by the Company's Chief Executive
Officer and each of the Company's other four most highly compensated executive
officers whose total cash compensation exceeded $100,000 for services rendered
in all capacities for the fiscal years ended December 31, 2002 (collectively,
the "Named Executive Officers").
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------------------------------------------------
AWARDS PAYOUTS
----------------------------------
OTHER
ANNUAL SECURITIES
COMPEN- RESTRICTED UNDERLYING
SATION STOCK OPTIONS/ LTIP
FISCAL BONUS ($) AWARDS SARS PAYOUT
NAME AND PRINCIPAL POSITION YEAR SALARY ($) ($) ($) (#) ($)
- ------------------------------ ------ ----------- ------ -------- ----------- ----------- -------
Imran Firoz 2003(1) -0- -0- -0- -0- -0- -0-
Chief Executive Officer
Director
Bruce Caldwell 2003(2) $48,000 -0- -0- -0- -0- -0-
Former Chief Executive Officer 2002 $48,000 -0- -0- -0- -0- -0-
2001 $48,000 -0- -0- -0- -0- -0-
(1) Mr. Imran Firoz was appointed Chief Executive Officer in April 2004.
(2) Mr. Caldwell resigned as an Officer and Director on August 31, 2004.
10
None of the Named Executive Officers received, exercised or had outstanding at
October 1, 2004, options or stock appreciation rights granted by the Company;
there were no employment agreements between the Company and any of the Named
Executive Officers; and there were no pension, retirement or other compensations
plans in which any of the Named Executive Officers were participants.
ADDITIONAL INFORMATION
This Information Statement should be read in conjunction with certain reports
that we previously filed with the Securities and Exchange Commission (the
"SEC"), including our:
Annual Report for the year ended August 31, 2003 (the "Form 10-KSB");
Quarterly Report for the quarter ended November 30, 2003 (the "Form 10-QSB").
Quarterly Report for the quarter ended February 29, 2004 (the "Form 10-QSB").
Quarterly Report for the quarter ended May 31, 2004 (the "Form 10-QSB").
Copies of these reports are not included in this Information Statement but may
be obtained from the SEC's web site at http://www.sec.gov/. We will mail copies
of our prior SEC reports to any shareholder upon written request.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Imran Firoz
------------------------------------
Imran Firoz, President
Irvine, California
October 13, 2004
End of Filing
EXHIBIT A
GIANT JR. INVESTMENTS, CORP.
2004 STOCK OPTION PLAN
SECTION 1. PURPOSE OF THE PLAN.
The purpose of the 2004 Stock Option Plan ("Plan") is to maintain the ability of
Giant Jr. Investments, Corp., a Nevada corporation (the "Company") and its
subsidiaries to attract and retain highly qualified and experienced directors,
employees and consultants and to give such directors, employees and consultants
a continued proprietary interest in the success of the Company and its
subsidiaries. In addition the Plan is intended to encourage ownership of common
stock, $.001 par value ("Common Stock"), of the Company by the directors,
employees and consultants of the Company and its Affiliates (as defined below)
and to provide increased incentive for such persons to render services and to
exert maximum effort for the success of the Company's business. The Plan
provides eligible employees and consultants the opportunity to participate in
the enhancement of shareholder value by the grants of warrants, options,
restricted common or convertible preferred stock, unrestricted common or
convertible preferred stock and other awards under this Plan and to have their
bonuses and/or consulting fees payable in warrants, restricted common or
convertible preferred stock, unrestricted common or convertible preferred stock
and other awards, or any combination thereof. In addition, the Company expects
that the Plan will further strengthen the identification of the directors,
employees and consultants with the stockholders. Certain options and warrants to
be granted under this Plan are intended to qualify as Incentive Stock Options
("ISOs") pursuant to Section 422 of the Internal Revenue Code of 1986, as
amended ("Code"), while other options and warrants and preferred stock granted
under this Plan will be nonqualified options or warrants which are not intended
to qualify as ISOs ("Nonqualified Options"), either or both as provided in the
agreements evidencing the options or warrants described in Section 5 hereof and
shares of preferred stock. As provided in the designation described in Section
7. Employees, consultants and directors who participate or become eligible to
participate in this Plan from time to time are referred to collectively herein
as "Participants". As used in this Plan, the term "Affiliates" means any "parent
corporation" of the Company and any "subsidiary corporation" of the Company
within the meaning of Code Sections 424(e) and (f), respectively.
SECTION 2. ADMINISTRATION OF THE PLAN.
(a) Composition of Committee. The Plan shall be administered by the Board
of Directors of the Company (the "Board"). When acting in such capacity the
Board is herein referred to as the "Committee," which shall also designate the
Chairman of the Committee. If the Company is governed by Rule 16b-3 promulgated
by the Securities and Exchange Commission ("Commission") pursuant to the
Securities Exchange Act of 1934, as amended ("Exchange Act"), no director shall
serve as a member of the Committee unless he or she is a "disinterested person"
within the meaning of such Rule 16b-3.
(b) Committee Action. The Committee shall hold its meetings at such times
and places as it may determine. A majority of its members shall constitute a
quorum, and all determinations of the Committee shall be made by not less than a
majority of its members. Any decision or determination reduced to writing and
signed by a majority of the members shall be fully as effective as if it had
been made by a majority vote of its members at a meeting duly called and held.
The Committee may designate the Secretary of the Company or other Company
employees to assist the Committee in the administration of the Plan, and may
grant authority to such persons to execute award agreements or other documents
on behalf of the Committee and the Company. Any duly constituted committee of
the Board satisfying the qualifications of this Section 2 may be appointed as
the Committee.
(c) Committee Expenses. All expenses and liabilities incurred by the
Committee in the administration of the Plan shall be borne by the Company. The
Committee may employ attorneys, consultants, accountants or other persons.
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SECTION 3. STOCK RESERVED FOR THE PLAN.
Subject to adjustment as provided in Section 5(d)(xiii) hereof, the aggregate
number of shares that may be optioned, subject to conversion or issued under the
Plan is 10,000,000 shares of Common Stock, warrants, options, preferred stock or
any combination thereof. The shares subject to the Plan shall consist of
authorized but unissued shares of Common Stock and such number of shares shall
be and is hereby reserved for sale for such purpose. Any of such shares which
may remain unsold and which are not subject to issuance upon exercise of
outstanding options or warrants or conversion of outstanding shares of preferred
stock at the termination of the Plan shall cease to be reserved for the purpose
of the Plan, but until termination of the Plan or the termination of the last of
the options or warrants granted under the Plan, whichever last occurs, the
Company shall at all times reserve a sufficient number of shares to meet the
requirements of the Plan. Should any option or warrant expire or be cancelled
prior to its exercise in full, the shares theretofore subject to such option or
warrant may again be made subject to an option, warrant or shares of convertible
preferred stock under the Plan.
Immediately upon the grant of any option, warrant, shares of preferred stock or
award, the number of shares of Common Stock that may be issued or optioned under
the Plan will be increased. The number of shares of such increase shall be an
amount such that immediately after such increase the total number of shares
issuable under the Plan and reserved for issuance upon exercise of outstanding
options, warrants or conversion of shares of preferred stock will equal not more
than 10% of the total number of issued and outstanding shares of Common Stock of
the Company. Such increase in the number of shares subject to the Plan shall
occur without the necessity of any further corporate action of any kind or
character.
SECTION 4. ELIGIBILITY.
The Participants shall include directors, employees, including officers, of the
Company and its divisions and subsidiaries, and consultants and attorneys who
provide bona fide services to the Company. Participants are eligible to be
granted warrants, options, restricted common or convertible preferred stock,
unrestricted common or convertible preferred stock and other awards under this
Plan and to have their bonuses and/or consulting fees payable in warrants,
restricted common or convertible preferred stock, unrestricted common or
convertible preferred stock and other awards. A Participant who has been granted
an option, warrant or preferred stock hereunder may be granted an additional
option, warrant options, warrants or preferred stock, if the Committee shall so
determine.
SECTION 5. GRANT OF OPTIONS OR WARRANTS.
(a) Committee Discretion. The Committee shall have sole and absolute
discretionary authority (i) to determine, authorize, and designate those persons
pursuant to this Plan who are to receive warrants, options, restricted common or
convertible preferred stock, or unrestricted common or convertible preferred
stock under the Plan, (ii) to determine the number of shares of Common Stock to
be covered by such grant or such options or warrants and the terms thereof,
(iii) to determine the type of Common Stock granted: restricted common or
convertible preferred stock, unrestricted common or convertible preferred stock
or a combination of restricted and unrestricted common or convertible preferred
stock, and (iv) to determine the type of option or warrant granted: ISO,
Nonqualified Option or a combination of ISO and Nonqualified Options. The
Committee shall thereupon grant options or warrants in accordance with such
determinations as evidenced by a written option or warrant agreement. Subject to
the express provisions of the Plan, the Committee shall have discretionary
authority to prescribe, amend and rescind rules and regulations relating to the
Plan, to interpret the Plan, to prescribe and amend the terms of the option or
warrant agreements (which need not be identical) and to make all other
determinations deemed necessary or advisable for the administration of the Plan.
(b) Stockholder Approval. All ISOs granted under this Plan are subject to,
and may not be exercised before, the approval of this Plan by the stockholders
prior to the first anniversary date of the Board meeting held to approve the
Plan, by the affirmative vote of the holders of a majority of the outstanding
shares of the Company present, or represented by proxy, and entitled to vote
thereat, or by written consent in accordance with the laws of the State of
Texas, provided that if such approval by the stockholders of the Company is not
forthcoming, all options or warrants and stock awards previously granted under
this Plan other than ISOs shall be valid in all respects.
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(c) Limitation on Incentive Stock Options and Warrants. The aggregate fair
market value (determined in accordance with Section 5(d)(ii) of this Plan at the
time the option or warrant is granted) of the Common Stock with respect to which
ISOs may be exercisable for the first time by any Participant during any
calendar year under all such plans of the Company and its Affiliates shall not
exceed $1,000,000.
(d) Terms and Conditions. Each option or warrant granted under the Plan
shall be evidenced by an agreement, in a form approved by the Committee, which
shall be subject to the following express terms and conditions and to such other
terms and conditions as the Committee may deem appropriate:
(i) Option or Warrant Period. The Committee shall promptly notify the
Participant of the option or warrant grant and a written agreement shall
promptly be executed and delivered by and on behalf of the Company and the
Participant, provided that the option or warrant grant shall expire if a
written agreement is not signed by said Participant (or his agent or
attorney) and returned to the Company within 60 days from date of receipt
by the Participant of such agreement. The date of grant shall be the date
the option or warrant is actually granted by the Committee, even though
the written agreement may be executed and delivered by the Company and the
Participant after that date. Each option or warrant agreement shall
specify the period for which the option or warrant thereunder is granted
(which in no event shall exceed ten years from the date of grant) and
shall provide that the option or warrant shall expire at the end of such
period. If the original term of an option or warrant is less than ten
years from the date of grant, the option or warrant may be amended prior
to its expiration, with the approval of the Committee and the Participant,
to extend the term so that the term as amended is not more than ten years
from the date of grant. However, in the case of an ISO granted to an
individual who, at the time of grant, owns stock possessing more than 10
percent of the total combined voting power of all classes of stock of the
Company or its Affiliate ("Ten Percent Stockholder"), such period shall
not exceed five years from the date of grant.
(ii) Option or Warrant Price. The purchase price of each share of Common
Stock subject to each option or warrant granted pursuant to the Plan shall
be determined by the Committee at the time the option or warrant is
granted and, in the case of ISOs, shall not be less than 100% of the fair
market value of a share of Common Stock on the date the option or warrant
is granted, as determined by the Committee. In the case of an ISO granted
to a Ten Percent Stockholder, the option or warrant price shall not be
less than 110% of the fair market value of a share of Common Stock on the
date the option or warrant is granted. The purchase price of each share of
Common Stock subject to a Nonqualified Option or Warrant under this Plan
shall be determined by the Committee prior to granting the option or
warrant. The Committee shall set the purchase price for each share subject
to a Nonqualified Option or Warrant at either the fair market value of
each share on the date the option or warrant is granted, or at such other
price as the Committee in its sole discretion shall determine. At the time
a determination of the fair market value of a share of Common Stock is
required to be made hereunder, the determination of its fair market value
shall be made by the Committee in such manner, as it deems appropriate.
(iii) Exercise Period. The Committee may provide in the option or warrant
agreement that an option or warrant may be exercised in whole,
immediately, or is to be exercisable in increments. In addition, the
Committee may provide that the exercise of all or part of an option or
warrant is subject to specified performance by the Participant.
(iv) Procedure for Exercise. Options or warrants shall be exercised in the
manner specified in the option or warrant agreement. The notice of
exercise shall specify the address to which the certificates for such
shares are to be mailed. A Participant shall be deemed to be a stockholder
with respect to shares covered by an option or warrant on the date
specified in the option or warrant agreement. As promptly as practicable,
the Company shall deliver to the Participant or other holder of the
warrant, certificates for the number of shares with respect to which such
option or warrant has been so exercised, issued in the holder's name or
such other name as holder directs; provided, however, that such delivery
shall be deemed effected for all purposes when a stock transfer agent of
the Company shall have deposited such certificates with a carrier for
overnight delivery, addressed to the holder at the address specified
pursuant to this Section 6(d).
A-3
(v) Termination of Employment. If an executive officer to whom an option
or warrant is granted ceases to be employed by the Company for any reason
other than death or disability, any option or warrant which is exercisable
on the date of such termination of employment may be exercised during a
period beginning on such date and ending at the time set forth in the
option or warrant agreement; provided, however, that if a Participant's
employment is terminated because of the Participant's theft or
embezzlement from the Company, disclosure of trade secrets of the Company
or the commission of a willful, felonious act while in the employment of
the Company (such reasons shall hereinafter be collectively referred to as
"for cause"), then any option or warrant or unexercised portion thereof
granted to said Participant shall expire upon such termination of
employment. Notwithstanding the foregoing, no ISO may be exercised later
than three months after an employee's termination of employment for any
reason other than death or disability.
(vi) Disability or Death of Participant. In the event of the determination
of disability or death of a Participant under the Plan while he or she is
employed by the Company, the options or warrants previously granted to him
may be exercised (to the extent he or she would have been entitled to do
so at the date of the determination of disability or death) at any time
and from time to time, within a period beginning on the date of such
determination of disability or death and ending at the time set forth in
the option or warrant agreement, by the former employee, the guardian of
his estate, the executor or administrator of his estate or by the person
or persons to whom his rights under the option or warrant shall pass by
will or the laws of descent and distribution, but in no event may the
option or warrant be exercised after its expiration under the terms of the
option or warrant agreement. Notwithstanding the foregoing, no ISO may be
exercised later than one year after the determination of disability or
death. A Participant shall be deemed to be disabled if, in the opinion of
a physician selected by the Committee, he or she is incapable of
performing services for the Company of the kind he or she was performing
at the time the disability occurred by reason of any medically
determinable physical or mental impairment which can be expected to result
in death or to be of long, continued and indefinite duration. The date of
determination of disability for purposes hereof shall be the date of such
determination by such physician.
(vii) Assignability. An option or warrant shall be assignable or otherwise
transferable, in whole or in part, by a Participant as provided in the
option, warrant or designation of the series of preferred stock.
(viii) Incentive Stock Options. Each option or warrant agreement may
contain such terms and provisions as the Committee may determine to be
necessary or desirable in order to qualify an option or warrant designated
as an incentive stock option.
(ix) Restricted Stock Awards. Awards of restricted stock under this Plan
shall be subject to all the applicable provisions of this Plan, including
the following terms and conditions, and to such other terms and conditions
not inconsistent therewith, as the Committee shall determine:
(A) Awards of restricted stock may be in addition to or in lieu of
option or warrant grants. Awards may be conditioned on the
attainment of particular performance goals based on criteria
established by the Committee at the time of each award of restricted
stock. During a period set forth in the agreement (the "Restriction
Period"), the recipient shall not be permitted to sell, transfer,
pledge, or otherwise encumber the shares of restricted stock; except
that such shares may be used, if the agreement permits, to pay the
option or warrant price pursuant to any option or warrant granted
under this Plan, provided an equal number of shares delivered to the
Participant shall carry the same restrictions as the shares so used.
Shares of restricted stock shall become free of all restrictions if
during the Restriction Period, (i) the recipient dies, (ii) the
recipient's directorship, employment, or consultancy terminates by
reason of permanent disability, as determined by the Committee,
(iii) the recipient retires after attaining both 59 1/2 years of age
and five years of continuous service with the Company and/or a
division or subsidiary, or (iv) if provided in the agreement, there
is a "change in control" of the Company (as defined in such
agreement). The Committee may require medical evidence of permanent
disability, including medical examinations by physicians selected by
it. Unless and to the extent otherwise provided in the agreement,
shares of restricted stock shall be forfeited and revert to the
Company upon the recipient's termination of directorship, employment
or consultancy during the Restriction Period for any reason other
than death, permanent disability, as determined by the Committee,
retirement after attaining both 59 1/2 years of age and five years
of continuous service with the Company and/or a subsidiary or
A-4
division, or, to the extent provided in the agreement, a "change in
control" of the Company (as defined in such agreement), except to
the extent the Committee, in its sole discretion, finds that such
forfeiture might not be in the best interests of the Company and,
therefore, waives all or part of the application of this provision
to the restricted stock held by such recipient. Certificates for
restricted stock shall be registered in the name of the recipient
but shall be imprinted with the appropriate legend and returned to
the Company by the recipient, together with a stock power endorsed
in blank by the recipient. The recipient shall be entitled to vote
shares of restricted stock and shall be entitled to all dividends
paid thereon, except that dividends paid in Common Stock or other
property shall also be subject to the same restrictions.
(B) Restricted Stock shall become free of the foregoing restrictions
upon expiration of the applicable Restriction Period and the Company
shall then deliver to the recipient Common Stock certificates
evidencing such stock. Restricted stock and any Common Stock
received upon the expiration of the restriction period shall be
subject to such other transfer restrictions and/or legend
requirements as are specified in the applicable agreement.
(x) Bonuses and Past Salaries and Fees Payable in Unrestricted Stock.
(A) In lieu of cash bonuses otherwise payable under the Company's or
applicable division's or subsidiary's compensation practices to
employees and consultants eligible to participate in this Plan, the
Committee, in its sole discretion, may determine that such bonuses
shall be payable in unrestricted Common Stock or partly in
unrestricted Common Stock and partly in cash. Such bonuses shall be
in consideration of services previously performed and as an
incentive toward future services and shall consist of shares of
unrestricted Common Stock subject to such terms as the Committee may
determine in its sole discretion. The number of shares of
unrestricted Common Stock payable in lieu of a bonus otherwise
payable shall be determined by dividing such bonus amount by the
fair market value of one share of Common Stock on the date the bonus
is payable, with fair market value determined as of such date in
accordance with Section 5(d)(ii).
(B) In lieu of salaries and fees otherwise payable by the Company to
employees, attorneys and consultants eligible to participate in this
Plan that were incurred for services rendered during, prior or after
the year of 2002, the Committee, in its sole discretion, may
determine that such unpaid salaries and fees shall be payable in
unrestricted Common Stock or partly in unrestricted Common Stock and
partly in cash. Such awards shall be in consideration of services
previously performed and as an incentive toward future services and
shall consist of shares of unrestricted Common Stock subject to such
terms as the Committee may determine in its sole discretion. The
number of shares of unrestricted Common Stock payable in lieu of a
salaries and fees otherwise payable shall be determined by dividing
each calendar month's of unpaid salary or fee amount by the average
trading value of the Common Stock for the calendar month during
which the subject services were provided.
(xi) No Rights as Stockholder. No Participant shall have any rights as a
stockholder with respect to shares covered by an option or warrant until
the option or warrant is exercised as provided in clause (d) above.
(xii) Extraordinary Corporate Transactions. The existence of outstanding
options or warrants shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
Reverse Splits, reorganizations, exchanges, or other changes in the
Company's capital structure or its business, or any merger or
consolidation of the Company, or any issuance of Common Stock or other
securities or subscription rights thereto, or any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise. If the Company recapitalizes or otherwise changes
its capital structure, or merges, consolidates, sells all of its assets or
dissolves (each of the foregoing a "Fundamental Change"), then thereafter
upon any exercise of an option or warrant theretofore granted the
Participant shall be entitled to purchase under such option or warrant, in
lieu of the number of shares of Common Stock as to which option or warrant
shall then be exercisable, the number and class of shares of stock and
securities to which the Participant would have been entitled pursuant to
the terms of the Fundamental Change if, immediately prior to such
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Fundamental Change, the Participant had been the holder of record of the
number of shares of Common Stock as to which such option or warrant is
then exercisable. If (i) the Company shall not be the surviving entity in
any merger or consolidation (or survives only as a subsidiary of another
entity), (ii) the Company sells all or substantially all of its assets to
any other person or entity (other than a wholly-owned subsidiary), (iii)
any person or entity (including a "group" as contemplated by Section
13(d)(3) of the Exchange Act) acquires or gains ownership or control of
(including, without limitation, power to vote) more than 50% of the
outstanding shares of Common Stock, (iv) the Company is to be dissolved
and liquidated, or (v) as a result of or in connection with a contested
election of directors, the persons who were directors of the Company
before such election shall cease to constitute a majority of the Board
(each such event in clauses (i) through (v) above is referred to herein as
a "Corporate Change"), the Committee, in its sole discretion, may
accelerate the time at which all or a portion of a Participant's option or
warrants may be exercised for a limited period of time before or after a
specified date.
(xiii) Changes in Company's Capital Structure. If the outstanding shares
of Common Stock or other securities of the Company, or both, for which the
option or warrant is then exercisable at any time be changed or exchanged
by declaration of a stock dividend, stock split, combination of shares,
Reverse Split, or reorganization, the number and kind of shares of Common
Stock or other securities which are subject to the Plan or subject to any
options or warrants theretofore granted, and the option or warrant prices,
shall be adjusted only as provided in the option or warrant.
(xiv) Acceleration of Options and Warrants. Except as hereinbefore
expressly provided, (i) the issuance by the Company of shares of stock or
any class of securities convertible into shares of stock of any class, for
cash, property, labor or services, upon direct sale, upon the exercise of
rights or warrants to subscribe therefor, or upon conversion of shares or
obligations of the Company convertible into such shares or other
securities, (ii) the payment of a dividend in property other than Common
Stock or (iii) the occurrence of any similar transaction, and in any case
whether or not for fair value, shall not affect, and no adjustment by
reason thereof shall be made with respect to, the number of shares of
Common Stock subject to options or warrants theretofore granted or the
purchase price per share, unless the Committee shall determine, in its
sole discretion, that an adjustment is necessary to provide equitable
treatment to Participant. Notwithstanding anything to the contrary
contained in this Plan, the Committee may, in its sole discretion,
accelerate the time at which any option or warrant may be exercised,
including, but not limited to, upon the occurrence of the events specified
in this Section 5, and is authorized at any time (with the consent of the
Participant) to purchase options or warrants pursuant to Section 6.
SECTION 6. RELINQUISHMENT OF OPTIONS OR WARRANTS.
(a) The Committee, in granting options or warrants hereunder, shall have
discretion to determine whether or not options or warrants shall include a right
of relinquishment as hereinafter provided by this Section 6. The Committee shall
also have discretion to determine whether an option or warrant agreement
evidencing an option or warrant initially granted by the Committee without a
right of relinquishment shall be amended or supplemented to include such a right
of relinquishment. Neither the Committee nor the Company shall be under any
obligation or incur any liability to any person by reason of the Committee's
refusal to grant or include a right of relinquishment in any option or warrant
granted hereunder or in any option or warrant agreement evidencing the same.
Subject to the Committee's determination in any case that the grant by it of a
right of relinquishment is consistent with Section 1 hereof, any option or
warrant granted under this Plan, and the option or warrant agreement evidencing
such option or warrant, may provide:
(i) That the Participant, or his or her heirs or other legal
representatives to the extent entitled to exercise the option or warrant
under the terms thereof, in lieu of purchasing the entire number of shares
subject to purchase thereunder, shall have the right to relinquish all or
any part of the then unexercised portion of the option or warrant (to the
extent then exercisable) for a number of shares of Common Stock to be
determined in accordance with the following provisions of this clause (i):
(A) The written notice of exercise of such right of relinquishment shall
state the percentage of the total number of shares of Common Stock
issuable pursuant to such relinquishment (as defined below) that the
Participant elects to receive;
A-6
(B) The number of shares of Common Stock, if any, issuable pursuant to
such relinquishment shall be the number of such shares, rounded to
the next greater number of full shares, as shall be equal to the
quotient obtained by dividing (i) the Appreciated Value by (ii) the
purchase price for each of such shares specified in such option or
warrant;
(C) For the purpose of this clause (C), "Appreciated Value" means the
excess, if any, of (x) the total current market value of the shares
of Common Stock covered by the option or warrant or the portion
thereof to be relinquished over (y) the total purchase price for
such shares specified in such option or warrant;
(ii) That such right of relinquishment may be exercised only upon receipt
by the Company of a written notice of such relinquishment which shall be
dated the date of election to make such relinquishment; and that, for the
purposes of this Plan, such date of election shall be deemed to be the
date when such notice is sent by registered or certified mail, or when
receipt is acknowledged by the Company, if mailed by other than registered
or certified mail or if delivered by hand or by any telegraphic
communications equipment of the sender or otherwise delivered; provided,
that, in the event the method just described for determining such date of
election shall not be or remain consistent with the provisions of Section
16(b) of the Exchange Act or the rules and regulations adopted by the
Commission thereunder, as presently existing or as may be hereafter
amended, which regulations exempt from the operation of Section 16(b) of
the Exchange Act in whole or in part any such relinquishment transaction,
then such date of election shall be determined by such other method
consistent with Section 16(b) of the Exchange Act or the rules and
regulations thereunder as the Committee shall in its discretion select and
apply;
(iii) That the "current market value" of a share of Common Stock on a
particular date shall be deemed to be its fair market value on that date
as determined in accordance with Paragraph 5(d)(ii); and
(iv) That the option or warrant, or any portion thereof, may be
relinquished only to the extent that (A) it is exercisable on the date
written notice of relinquishment is received by the Company, and (B) the
holder of such option or warrant pays, or makes provision satisfactory to
the Company for the payment of, any taxes which the Company is obligated
to collect with respect to such relinquishment.
(b) The Committee shall have sole discretion to consent to or disapprove,
and neither the Committee nor the Company shall be under any liability by reason
of the Committee's disapproval of, any election by a holder of preferred stock
to relinquish such preferred stock in whole or in part as provided in Paragraph
7(a), except that no such consent to or approval of a relinquishment shall be
required under the following circumstances. Each Participant who is subject to
the short-swing profits recapture provisions of Section 16(b) of the Exchange
Act ("Covered Participant") shall not be entitled to receive shares of Common
Stock when options or warrants are relinquished during any window period
commencing on the third business day following the Company's release of a
quarterly or annual summary statement of sales and earnings and ending on the
twelfth business day following such release ("Window Period"). A Covered
Participant shall be entitled to receive shares of Common Stock upon the
relinquishment of options or warrants outside a Window Period.
(c) The Committee, in granting options or warrants hereunder, shall have
discretion to determine the terms upon which such options or warrants shall be
relinquishable, subject to the applicable provisions of this Plan, and including
such provisions as are deemed advisable to permit the exemption from the
operation from Section 16(b) of the Exchange Act of any such relinquishment
transaction, and options or warrants outstanding, and option agreements
evidencing such options, may be amended, if necessary, to permit such exemption.
If options or warrants are relinquished, such option or warrant shall be deemed
to have been exercised to the extent of the number of shares of Common Stock
covered by the option or warrant or part thereof which is relinquished, and no
further options or warrants may be granted covering such shares of Common Stock.
(d) Any options or warrants or any right to relinquish the same to the
Company as contemplated by this Paragraph 6 shall be assignable by the
Participant, provided the transaction complies with any applicable securities
laws.
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(e) Except as provided in Section 6(f) below, no right of relinquishment
may be exercised within the first six months after the initial award of any
option or warrant containing, or the amendment or supplementation of any
existing option or warrant agreement adding, the right of relinquishment.
(f) No right of relinquishment may be exercised after the initial award of
any option or warrant containing, or the amendment or supplementation of any
existing option or warrant agreement adding the right of relinquishment, unless
such right of relinquishment is effective upon the Participant's death,
disability or termination of his relationship with the Company for a reason
other than "for cause."
SECTION 7. GRANT OF CONVERTIBLE PREFERRED STOCK.
(a) Committee Discretion. The Committee shall have sole and absolute
discretionary authority (i) to determine, authorize, and designate those persons
pursuant to this Plan who are to receive restricted preferred stock, or
unrestricted preferred stock under the Plan, and (ii) to determine the number of
shares of Common Stock to be issued upon conversion of such shares of preferred
stock and the terms thereof. The Committee shall thereupon grant shares of
preferred stock in accordance with such determinations as evidenced by a written
preferred stock designation. Subject to the express provisions of the Plan, the
Committee shall have discretionary authority to prescribe, amend and rescind
rules and regulations relating to the Plan, to interpret the Plan, to prescribe
and amend the terms of the preferred stock designation (which need not be
identical) and to make all other determinations deemed necessary or advisable
for the administration of the Plan.
(b) Terms and Conditions. Each series of preferred stock granted under the
Plan shall be evidenced by a designation in the form for filing with the
Secretary of State of the state of incorporation of the Company, containing such
terms as approved by the Committee, which shall be subject to the following
express terms and conditions and to such other terms and conditions as the
Committee may deem appropriate:
(i) Conversion Ratio. The number of shares of Common Stock issuable upon
conversion of each share of preferred stock granted pursuant to the Plan
shall be determined by the Committee at the time the preferred stock is
granted. The conversion ration may be determined by reference to the fair
market value of each share of Common Stock on the date the preferred stock
is granted, or at such other price as the Committee in its sole discretion
shall determine. At the time a determination of the fair market value of a
share of Common Stock is required to be made hereunder, the determination
of its fair market value shall be made in accordance with Paragraph
5(d)(ii).
(ii) Conversion Period. The Committee may provide in the preferred stock
agreement that an preferred stock may be converted in whole, immediately,
or is to be convertible in increments. In addition, the Committee may
provide that the conversion of all or part of an preferred stock is
subject to specified performance by the Participant.
(iii) Procedure for Conversion. Shares of preferred stock shall be
converted in the manner specified in the preferred stock designation. The
notice of conversion shall specify the address to which the certificates
for such shares are to be mailed. A Participant shall be deemed to be a
stockholder with respect to shares covered by preferred stock on the date
specified in the preferred stock agreement . As promptly as practicable,
the Company shall deliver to the Participant or other holder of the
warrant, certificates for the number of shares with respect to which such
preferred stock has been so converted, issued in the holder's name or such
other name as holder directs; provided, however, that such delivery shall
be deemed effected for all purposes when a stock transfer agent of the
Company shall have deposited such certificates with a carrier for
overnight delivery, addressed to the holder at the address specified
pursuant to this Section 6(d).
(iv) Termination of Employment. If an executive officer to whom preferred
stock is granted ceases to be employed by the Company for any reason other
than death or disability, any preferred stock which is convertible on the
date of such termination of employment may be converted during a period
beginning on such date and ending at the time set forth in the preferred
stock agreement; provided, however, that if a Participant's employment is
terminated because of the Participant's theft or embezzlement from the
Company, disclosure of trade secrets of the Company or the commission of a
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willful, felonious act while in the employment of the Company (such
reasons shall hereinafter be collectively referred to as "for cause"),
then any preferred stock or unconverted portion thereof granted to said
Participant shall expire upon such termination of employment.
Notwithstanding the foregoing, no ISO may be converted later than three
months after an employee's termination of employment for any reason other
than death or disability.
(v) Disability or Death of Participant. In the event of the determination
of disability or death of a Participant under the Plan while he or she is
employed by the Company, the preferred stock previously granted to him may
be converted (to the extent he or she would have been entitled to do so at
the date of the determination of disability or death) at any time and from
time to time, within a period beginning on the date of such determination
of disability or death and ending at the time set forth in the preferred
stock agreement, by the former employee, the guardian of his estate, the
executor or administrator of his estate or by the person or persons to
whom his rights under the preferred stock shall pass by will or the laws
of descent and distribution, but in no event may the preferred stock be
converted after its expiration under the terms of the preferred stock
agreement. Notwithstanding the foregoing, no ISO may be converted later
than one year after the determination of disability or death. A
Participant shall be deemed to be disabled if, in the opinion of a
physician selected by the Committee, he or she is incapable of performing
services for the Company of the kind he or she was performing at the time
the disability occurred by reason of any medically determinable physical
or mental impairment which can be expected to result in death or to be of
long, continued and indefinite duration. The date of determination of
disability for purposes hereof shall be the date of such determination by
such physician.
(vi) Assignability. Preferred stock shall be assignable or otherwise
transferable, in whole or in part, by a Participant.
(vii) Restricted Stock Awards. Awards of restricted preferred stock under
this Plan shall be subject to all the applicable provisions of this Plan,
including the following terms and conditions, and to such other terms and
conditions not inconsistent therewith, as the Committee shall determine:
(A) Awards of restricted preferred stock may be in addition to or in
lieu of preferred stock grants. Awards may be conditioned on the
attainment of particular performance goals based on criteria
established by the Committee at the time of each award of restricted
preferred stock. During a period set forth in the agreement (the
"Restriction Period"), the recipient shall not be permitted to sell,
transfer, pledge, or otherwise encumber the shares of restricted
preferred stock. Shares of restricted preferred stock shall become
free of all restrictions if during the Restriction Period, (i) the
recipient dies, (ii) the recipient's directorship, employment, or
consultancy terminates by reason of permanent disability, as
determined by the Committee, (iii) the recipient retires after
attaining both 59 1/2 years of age and five years of continuous
service with the Company and/or a division or subsidiary, or (iv) if
provided in the agreement, there is a "change in control" of the
Company (as defined in such agreement). The Committee may require
medical evidence of permanent disability, including medical
examinations by physicians selected by it. Unless and to the extent
otherwise provided in the agreement, shares of restricted preferred
stock shall be forfeited and revert to the Company upon the
recipient's termination of directorship, employment or consultancy
during the Restriction Period for any reason other than death,
permanent disability, as determined by the Committee, retirement
after attaining both 59 1/2 years of age and five years of
continuous service with the Company and/or a subsidiary or division,
or, to the extent provided in the agreement, a "change in control"
of the Company (as defined in such agreement), except to the extent
the Committee, in its sole discretion, finds that such forfeiture
might not be in the best interests of the Company and, therefore,
waives all or part of the application of this provision to the
restricted preferred stock held by such recipient. Certificates for
restricted preferred stock shall be registered in the name of the
recipient but shall be imprinted with the appropriate legend and
returned to the Company by the recipient, together with a preferred
stock power endorsed in blank by the recipient. The recipient shall
be entitled to vote shares of restricted preferred stock and shall
be entitled to all dividends paid thereon, except that dividends
paid in Common Stock or other property shall also be subject to the
same restrictions.
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(B) Restricted preferred stock shall become free of the foregoing
restrictions upon expiration of the applicable Restriction Period
and the Company shall then deliver to the recipient Common Stock
certificates evidencing such stock. Restricted preferred stock and
any Common Stock received upon the expiration of the restriction
period shall be subject to such other transfer restrictions and/or
legend requirements as are specified in the applicable agreement.
(x) Bonuses and Past Salaries and Fees Payable in Unrestricted Preferred
stock.
(A) In lieu of cash bonuses otherwise payable under the Company's or
applicable division's or subsidiary's compensation practices to
employees and consultants eligible to participate in this Plan, the
Committee, in its sole discretion, may determine that such bonuses
shall be payable in unrestricted Common Stock or partly in
unrestricted Common Stock and partly in cash. Such bonuses shall be
in consideration of services previously performed and as an
incentive toward future services and shall consist of shares of
unrestricted Common Stock subject to such terms as the Committee may
determine in its sole discretion. The number of shares of
unrestricted Common Stock payable in lieu of a bonus otherwise
payable shall be determined by dividing such bonus amount by the
fair market value of one share of Common Stock on the date the bonus
is payable, with fair market value determined as of such date in
accordance with Section 5(d)(ii).
(B) In lieu of salaries and fees otherwise payable by the Company to
employees, attorneys and consultants eligible to participate in this
Plan that were incurred for services rendered during, prior or after
the year of 2002, the Committee, in its sole discretion, may
determine that such unpaid salaries and fees shall be payable in
unrestricted Common Stock or partly in unrestricted Common Stock and
partly in cash. Such awards shall be in consideration of services
previously performed and as an incentive toward future services and
shall consist of shares of unrestricted Common Stock subject to such
terms as the Committee may determine in its sole discretion. The
number of shares of unrestricted Common Stock payable in lieu of
salaries and fees otherwise payable shall be determined by dividing
each calendar month's of unpaid salary or fee amount by the average
trading value of the Common Stock for the calendar month during
which the subject services were provided.
(xi) No Rights as Stockholder. No Participant shall have any rights as a
stockholder with respect to shares covered by an preferred stock until the
preferred stock is converted as provided in clause (b)(iii) above.
(xii) Extraordinary Corporate Transactions. The existence of outstanding
preferred stock shall not affect in any way the right or power of the
Company or its stockholders to make or authorize any or all adjustments,
Reverse Splits, reorganizations, exchanges, or other changes in the
Company's capital structure or its business, or any merger or
consolidation of the Company, or any issuance of Common Stock or other
securities or subscription rights thereto, or any issuance of bonds,
debentures, preferred or prior preference stock ahead of or affecting the
Common Stock or the rights thereof, or the dissolution or liquidation of
the Company, or any sale or transfer of all or any part of its assets or
business, or any other corporate act or proceeding, whether of a similar
character or otherwise. If the Company recapitalizes or otherwise changes
its capital structure, or merges, consolidates, sells all of its assets or
dissolves (each of the foregoing a "Fundamental Change"), then thereafter
upon any conversion of preferred stock theretofore granted the Participant
shall be entitled to the number of shares of Common Stock upon conversion
of such preferred stock, in lieu of the number of shares of Common Stock
as to which preferred stock shall then be convertible, the number and
class of shares of stock and securities to which the Participant would
have been entitled pursuant to the terms of the Fundamental Change if,
immediately prior to such Fundamental Change, the Participant had been the
holder of record of the number of shares of Common Stock as to which such
preferred stock is then convertible. If (i) the Company shall not be the
surviving entity in any merger or consolidation (or survives only as a
subsidiary of another entity), (ii) the Company sells all or substantially
all of its assets to any other person or entity (other than a wholly-owned
subsidiary), (iii) any person or entity (including a "group" as
contemplated by Section 13(d)(3) of the Exchange Act) acquires or gains
ownership or control of (including, without limitation, power to vote)
more than 50% of the outstanding shares of Common Stock, (iv) the Company
is to be dissolved and liquidated, or (v) as a result of or in connection
with a contested election of directors, the persons who were directors of
the Company before such election shall cease to constitute a majority of
the Board (each such event in clauses (i) through (v) above is referred to
herein as a "Corporate Change"), the Committee, in its sole discretion,
may accelerate the time at which all or a portion of a Participant's
shares of preferred stock may be converted for a limited period of time
before or after a specified date.
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(xiii) Changes in Company's Capital Structure. If the outstanding shares
of Common Stock or other securities of the Company, or both, for which the
preferred stock is then convertible at any time be changed or exchanged by
declaration of a stock dividend, stock split, combination of shares,
Reverse Split, or reorganization, the number and kind of shares of Common
Stock or other securities which are subject to the Plan or subject to any
preferred stock theretofore granted, and the conversion ratio, shall be
adjusted only as provided in the designation of the preferred stock.
(xiv) Acceleration of Conversion of Preferred Stock. Except as
hereinbefore expressly provided, (i) the issuance by the Company of shares
of stock or any class of securities convertible into shares of stock of
any class, for cash, property, labor or services, upon direct sale, upon
the conversion of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of the Company convertible into such
shares or other securities, (ii) the payment of a dividend in property
other than Common Stock or (iii) the occurrence of any similar
transaction, and in any case whether or not for fair value, shall not
affect, and no adjustment by reason thereof shall be made with respect to,
the number of shares of Common Stock subject to preferred stock
theretofore granted, unless the Committee shall determine, in its sole
discretion, that an adjustment is necessary to provide equitable treatment
to Participant. Notwithstanding anything to the contrary contained in this
Plan, the Committee may, in its sole discretion, accelerate the time at
which any preferred stock may be converted, including, but not limited to,
upon the occurrence of the events specified in this Section 7(xiv).
SECTION 8. AMENDMENTS OR TERMINATION.
The Board may amend, alter or discontinue the Plan, but no amendment or
alteration shall be made which would impair the rights of any Participant,
without his consent, under any option, warrant or preferred stock theretofore
granted.
SECTION 9. COMPLIANCE WITH OTHER LAWS AND REGULATIONS.
The Plan, the grant and exercise of options or warrants and grant and conversion
of preferred stock thereunder, and the obligation of the Company to sell and
deliver shares under such options, warrants or preferred stock, shall be subject
to all applicable federal and state laws, rules and regulations and to such
approvals by any governmental or regulatory agency as may be required. The
Company shall not be required to issue or deliver any certificates for shares of
Common Stock prior to the completion of any registration or qualification of
such shares under any federal or state law or issuance of any ruling or
regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable. Any adjustments provided for
in subparagraphs 5(d)(xii), (xiii) and (xiv) shall be subject to any shareholder
action required by the corporate law of the state of incorporation of the
Company.
SECTION 10. PURCHASE FOR INVESTMENT.
Unless the options, warrants, shares of convertible preferred stock and shares
of Common Stock covered by this Plan have been registered under the Securities
Act of 1933, as amended, or the Company has determined that such registration is
unnecessary, each person acquiring or exercising an option or warrant under this
Plan or converting shares of preferred stock may be required by the Company to
give a representation in writing that he or she is acquiring such option or
warrant or such shares for his own account for investment and not with a view
to, or for sale in connection with, the distribution of any part thereof.
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SECTION 11. TAXES.
(a) The Company may make such provisions as it may deem appropriate for
the withholding of any taxes which it determines is required in connection with
any options, warrants or preferred stock granted under this Plan.
(b) Notwithstanding the terms of Paragraph 11 (a), any Participant may pay
all or any portion of the taxes required to be withheld by the Company or paid
by him or her in connection with the exercise of a nonqualified option or
warrant or conversion of preferred stock by electing to have the Company
withhold shares of Common Stock, or by delivering previously owned shares of
Common Stock, having a fair market value, determined in accordance with
Paragraph 5(d)(ii), equal to the amount required to be withheld or paid. A
Participant must make the foregoing election on or before the date that the
amount of tax to be withheld is determined ("Tax Date"). All such elections are
irrevocable and subject to disapproval by the Committee. Elections by Covered
Participants are subject to the following additional restrictions: (i) such
election may not be made within six months of the grant of an option or warrant,
provided that this limitation shall not apply in the event of death or
disability, and (ii) such election must be made either six months or more prior
to the Tax Date or in a Window Period. Where the Tax Date in respect of an
option or warrant is deferred until six months after exercise and the Covered
Participant elects share withholding, the full amount of shares of Common Stock
will be issued or transferred to him upon exercise of the option or warrant, but
he or she shall be unconditionally obligated to tender back to the Company the
number of shares necessary to discharge the Company's withholding obligation or
his estimated tax obligation on the Tax Date.
SECTION 12. REPLACEMENT OF OPTIONS, WARRANTS AND PREFERRED STOCK.
The Committee from time to time may permit a Participant under the Plan to
surrender for cancellation any unexercised outstanding option or warrant or
unconverted Preferred stock and receive from the Company in exchange an option,
warrant or preferred stock for such number of shares of Common Stock as may be
designated by the Committee. The Committee may, with the consent of the holder
of any outstanding option, warrant or preferred stock, amend such option,
warrant or preferred stock, including reducing the exercise price of any option
or warrant to not less than the fair market value of the Common Stock at the
time of the amendment, increasing the conversion ratio of any preferred stock
and extending the exercise or conversion term of and warrant, option or
preferred stock.
SECTION 13. NO RIGHT TO COMPANY EMPLOYMENT.
Nothing in this Plan or as a result of any option or warrant granted pursuant to
this Plan shall confer on any individual any right to continue in the employ of
the Company or interfere in any way with the right of the Company to terminate
an individual's employment at any time. The option, warrant or preferred stock
agreements may contain such provisions as the Committee may approve with
reference to the effect of approved leaves of absence.
SECTION 14. LIABILITY OF COMPANY.
The Company and any Affiliate which is in existence or hereafter comes into
existence shall not be liable to a Participant or other persons as to:
(a) The Non-Issuance of Shares. The non-issuance or sale of shares as to
which the Company has been unable to obtain from any regulatory body having
jurisdiction the authority deemed by the Company's counsel to be necessary to
the lawful issuance and sale of any shares hereunder; and
(b) Tax Consequences. Any tax consequence expected, but not realized, by
any Participant or other person due to the exercise of any option or warrant or
the conversion of any preferred stock granted hereunder.
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SECTION 15. EFFECTIVENESS AND EXPIRATION OF PLAN.
The Plan shall be effective on the date the Board adopts the Plan. The Plan
shall expire ten years after the date the Board approves the Plan and thereafter
no option, warrant or preferred stock shall be granted pursuant to the Plan.
SECTION 16. NON-EXCLUSIVITY OF THE PLAN.
Neither the adoption by the Board nor the submission of the Plan to the
stockholders of the Company for approval shall be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangements
as it may deem desirable, including without limitation, the granting of
restricted stock or stock options, warrants or preferred stock otherwise than
under the Plan, and such arrangements may be either generally applicable or
applicable only in specific cases.
SECTION 17. GOVERNING LAW.
This Plan and any agreements hereunder shall be interpreted and construed in
accordance with the laws of the state of incorporation of the Company and
applicable federal law.
SECTION 18. CASHLESS EXERCISE.
The Committee also may allow cashless exercises as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Committee determines to be consistent with the
Plan's purpose and applicable law. The proceeds from such a payment shall be
added to the general funds of the Company and shall be used for general
corporate purposes.
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